Fixed Deposits – Compare FD Interest Rates & Invest Online
Fixed deposits have earned their place in Indian household savings for a straightforward reason: the return is fixed the day you invest, and it stays unchanged regardless of what the market does afterward. This guide explains what a fixed deposit is and how interest is calculated on it.
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What Are Fixed Deposits?
A fixed deposit is a facility offered by banks and NBFCs (Non-Banking Financial Companies) where you deposit a lump sum for a set period and at a fixed interest rate. The rate of interest doesn't move once it's locked in, irrespective of the market performance. This is exactly what sets an FD apart from market-linked investments. The return is known in advance, not estimated.
Not every FD looks the same, though. Issuer, tenure, payout frequency, and credit rating all vary, giving investors genuine choice depending on what they actually need; regular income now or a lump sum later. Corporate and NBFC FDs tend to offer a better rate than a standard bank deposit, though that typically comes with a somewhat different risk profile. That's why checking the issuer's credit rating before investing genuinely matters.
Why Invest in Fixed Deposits?
Fixed deposits are popular because they offer stable and predictable returns, involve low risk since they are not market-linked, and offer flexible returns.
Guaranteed Returns
The interest rate remains unchanged throughout the tenure, thus, offering guaranteed returns upon maturity. Unlike stock market funds, the interest rate does not change.
Flexible Tenure
Account holders have the flexibility to choose a tenure of their choice. It can range from 7 days to 10 years in most cases.
Premature Withdrawals*
You can access your funds in case of an emergency. Usually, the penalty is nominal and interest is adjusted as per the terms of the issuer.
Low Risk
Fixed deposits are typically not associated with market risks. Hence, fixed deposits offer higher security and better safety against market risks.
Easy-to-understand
Fixed deposits have been a part of banking for decades. It is easier for common people to understand since FDs do not involve technicality. You simply fix an amount for a specific tenure at a pre-decided interest rate.
Principal & Interest Insured
Get your principal & interest of your Bank FDs insured up to ₹5 Lakh under DICGC. Corporate & NBFC FDs offer attractive fixed interest rates subject to issuer creditworthiness (not government or DICGC guaranteed).
Risk Disclosure: FD investments are subject to credit/default, premature withdrawal/liquidity, interest rate/reinvestment, and inflation risks, which may affect your returns and the availability or value of your investment.
Distributor Disclosure: Wealth India Financial Services (WIFS) acts as a distributor/facilitator for fixed deposit schemes and may receive distribution commission or placement fees from partner banks and NBFCs for facilitating these deposits.
How Fixed Deposits Work
You deposit a lump sum for a fixed tenure at a predetermined interest rate. At maturity, you receive your principal along with the applicable interest, based on the FD's terms.
How Fixed Deposits Work
You deposit a lump sum for a fixed tenure at a predetermined interest rate. At maturity, you receive your principal along with the applicable interest, based on the FD's terms.
Types of Fixed Deposits
Fixed deposits are of different types, meant to suit the different financial goals of individuals.
Regular Fixed Deposits
It is the standard FD where the account holder fixes a lump sum amount for a fixed tenure. In return, a fixed interest rate is offered throughout the tenure.
Tax-saving Fixed Deposits
It is a special fixed deposit where the account holder can seek tax benefits. Tax-saving FDs typically have a lock-in period of five years.
Senior Citizen Fixed Deposits
Senior citizens above 60 years of age can open senior citizens FD. It offers slightly higher interest rates than regular FDs.
Cumulative and Non-Cumulative FDs
In cumulative FDs, the interest is compounded and added to the principal and maturity amount is paid at the end of the tenure. In non-cumulative FDs, the interest is paid out at regular intervals such as monthly, quarterly, or annually.
How to Choose the Right Fixed Deposit
Choosing an FD is not only about finding the highest interest rate. Consider the following before investing
Compare Interest Rates
Check the interest rate offered by different issuers and compare it with the tenure and payout option.
Check the Issuer's Credit Rating
For corporate and NBFC FDs, review the issuer's credit rating to understand its credit profile.
Pick a Tenure That Suits You
Choose a tenure that fits when you expect to need the money, especially if you may need access to it before maturity.
Choose the Right Payout Option
Select a cumulative FD if you want the interest added to your maturity amount or a non-cumulative FD if you need regular interest payouts.
Requirements for Investing in Fixed Deposits
Make sure you meet the following criteria to invest in FDs through FundsIndia
Minimum Investment Amount
FD investments typically start from ₹1,000, though the minimum may vary depending on the issuer selected. The applicable minimum is displayed on each FD's page.
Completed KYC
Investors must have a valid and completed KYC to invest in Fixed Deposits through FundsIndia.
Registered Bank Account
Interest payouts and principal repayment at maturity are credited to your registered bank account.
PAN Details
Providing PAN at the time of investment ensures TDS, where applicable, is deducted at the correct rate rather than a higher default rate.
Types of Fixed Deposits
Regular Fixed Deposits
It is the standard FD where the account holder fixes a lump sum amount for a fixed tenure. In return, a fixed interest rate is offered throughout the tenure.
Tax-saving Fixed Deposits
It is a special fixed deposit where the account holder can seek tax benefits. Tax-saving FDs typically have a lock-in period of five years.
Senior Citizen Fixed Deposits
Senior citizens above 60 years of age can open senior citizens FD. It offers slightly higher interest rates than regular FDs.
Cumulative and Non-Cumulative FDs
In cumulative FDs, the interest is compounded and added to the principal and maturity amount is paid at the end of the tenure. In non-cumulative FDs, the interest is paid out at regular intervals such as monthly, quarterly, or annually.
How to Choose the Right Fixed Deposit
Compare Interest Rates
Check the interest rate offered by different issuers and compare it with the tenure and payout option.
Check the Issuer's Credit Rating
For corporate and NBFC FDs, review the issuer's credit rating to understand its credit profile.
Pick a Tenure That Suits You
Choose a tenure that fits when you expect to need the money, especially if you may need access to it before maturity.
Choose the Right Payout Option
Select a cumulative FD if you want the interest added to your maturity amount or a non-cumulative FD if you need regular interest payouts.
Requirements for Investing in Fixed Deposits
Minimum Investment Amount
FD investments typically start from ₹1,000, though the minimum may vary depending on the issuer selected. The applicable minimum is displayed on each FD's page.
Completed KYC
Investors must have a valid and completed KYC to invest in Fixed Deposits through FundsIndia.
Registered Bank Account
Interest payouts and principal repayment at maturity are credited to your registered bank account.
PAN Details
Providing PAN at the time of investment ensures TDS, where applicable, is deducted at the correct rate rather than a higher default rate.
Start building a stable, predictable component into your portfolio without the hassle of approaching multiple issuers individually.
Who Should Consider Investing in Fixed Depos
Fixed deposits can suit investors who value predictable returns and want to keep their money away from market ups and downs. They may be worth considering for
Conservative Investors
If you prefer stability over market-linked returns, an FD can offer predictable interest for a fixed tenure.
Investors With Short- to Medium-Term Goals
If you are saving for a goal a few months or years away, you can choose a tenure that matches when you need the money.
Investors Looking for Regular Income
If you need a steady income from your savings, a non-cumulative FD can provide interest payouts at regular intervals.
Those Building a Stable Portfolio
If your portfolio is largely invested in equities or other market-linked assets, FDs can add a more stable component to your overall investments.
Not sure which FD suits your portfolio? Your dedicated FundsIndia wealth manager can help with financial planning for your goals and guide you on asset allocation and wealth management throughout your investment journey.
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Frequently Asked Questions
What is the current FD interest rate in India?
FD interest rates vary by issuer, tenure, and depositor category, and change periodically based on the broader interest rate environment. Corporate and NBFC FDs listed on FundsIndia typically offer higher rates than standard bank FDs, and current rates for each option are displayed on its individual page on the platform.
What is the minimum amount required to open a fixed deposit?
FD investments through FundsIndia typically start from ₹1,000, though the exact minimum can vary by issuer and is displayed on each FD's page before you invest.
Can I withdraw my fixed deposit before maturity?
In most cases, yes, subject to the terms specified by the issuer. Premature withdrawal usually results in a reduced interest payout, and the exact terms including any applicable penalty, vary depending on the FD selected.
How is TDS calculated on fixed deposit interest?
For bank FDs, TDS at 10% applies once annual interest crosses ₹50,000 for individuals below 60, and ₹1,00,000 for senior citizens. Providing your PAN at the time of investment ensures TDS is deducted at 10% rather than the higher 20% rate applicable without one.
Which is better, bank FD or corporate FD?
It depends on your priorities. Bank FDs are generally considered marginally safer and come with DICGC insurance coverage up to ₹5 lakh per depositor, while corporate and NBFC FDs typically offer higher interest rates, with safety linked to the issuer's credit rating. Reviewing the credit rating before investing is essential either way.
What is a tax-saving fixed deposit under Section 80C?
A tax-saving FD is a fixed deposit with a mandatory 5-year lock-in that qualifies for a tax deduction of up to ₹1.5 lakh on the principal invested under Section 123 of the Income Tax Act, 2025 (earlier Section 80C of Income Tax Act, 1961). The interest earned, however, remains fully taxable, and premature withdrawal is not permitted on this specific category of FD. This deduction is exclusively available to taxpayers choosing the old tax regime.
Can NRIs invest in fixed deposits in India?
Yes. NRIs can invest through NRE (Non-Resident External), NRO (Non-Resident Ordinary), or FCNR (Foreign Currency Non-Resident) fixed deposit accounts, each with different rules around repatriation, currency, and taxation, depending on the specific account type chosen.
How do senior citizens get higher FD interest rates?
Most issuers offer an additional interest rate, commonly around 0.25% to 0.65% over the standard rate, for depositors aged 60 and above. This benefit is usually applied automatically once the FD is booked in the senior citizen's name, subject to the issuer's specific terms.
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