Which Banks are Giving the Highest FD Interest Rates?

For years, Fixed Deposits (FDs) have remained the preferred investment option for safe investors whose primary objective is a predictable return. Since the interest rate is a central factor in defining the appeal of FDs, it becomes imperative for investors to locate such banks that provide maximum FD interests. In this competitive financial environment, different banks compete to offer reasonable and the highest FD interest rates based on market situation, economic parameters, and RBI’s monetary policy.

Public and private banks regularly change interest rates to remain competitive and attract deposits. In this post, we will discuss banks offering the highest FD rates so that investors can compare the various FD Interest Rates and choose the right bank to book FDs. 

Banks Offering the Highest FD Interest Rate in 2024

Wondering which bank has highest interest rate on fixed deposit? Then, below, we provide a list of some of the prominent banks in India offering attractive and high fixed deposit interest rates. 

Banks	HighestFD rate(% p.a.)	1-yearFD rate(% p.a.)	3-yearFD rate(% p.a.)	5-yearFD rate(% p.a.)	Additionalinterest ratefor senior citizens(% p.a.)
Unity Small Finance Bank	9.00	7.35	7.65	7.65	0.50
Suryoday Small Finance Bank	8.65	6.85	8.60	8.25	0.40-0.50
Fincare Small Finance Bank	8.61	7.65	8.11	8.00	0.60
Equitas Small Finance Bank	8.50	8.20	8.00	7.25	0.50
Jana Small Finance Bank	8.50	8.50	7.25	7.25	0.50
Utkarsh Small Finance Bank	8.50	8.00	8.50	7.50	0.60
SBM Bank	8.25	7.05	7.30	7.75	0.50
ESAF Small Finance Bank	8.25	6.00	6.75	6.25	0.50
Ujjivan Small Finance Bank	8.25	8.25	7.20	7.20	0.50
AU Small Finance Bank	8.00	6.75	8.00	7.25	0.50

Senior citizens (60 years and above) can earn FDRs up to 9.50% p.a. On tenures of one – to ten years. Senior citizens usually enjoy the prevailing FD interest rate of 50-80 bps added by banks on top of their regular fixed deposit rates. Certain banks also provide the highest FD interest rates in the 20-30 bps range on top of these additional senior citizen FD rates offered by special FD schemes. 

Moreover, most banks have preferential interest rates for senior citizens who are 80 years and above, so investors can do their research and invest accordingly. 

Essential Highlights of FD Interest Rates 

• In contrast to standard savings accounts, fixed deposits generally provide the highest FD interest rate.
• All Indians living in the country and HUFs can open an account.
• One can add a nominee to the application form. They can claim the FD amount in case of the account holder’s death. The nominee must provide authentic documents on the account holder’s death.
• You can withdraw your fixed deposit earlier during an emergency by paying a penalty.
• Banks offer a dynamic feature known as a sweep-in facility through which fixed deposits are linked to their savings accounts. It helps to facilitate easy movement of the excess funds from savings accounts automatically into fixed deposits. It gives the depositors a to earn fixed deposit interest rates, and they can also withdraw the FD when required. 

Notable Features Of Fixed Deposits

Fixed deposits, popularly known as FDs, are financial products famous for their stability and guaranteed returns. The features of fixed deposits may vary slightly among different banks and financial institutions, but they generally encompass the following aspects:

1. Fixed Tenure: 

The set tenure is among the characteristics of a fixed deposit. Investors can decide on the fixed deposit term during account opening, which varies from seven days to 10 years. This function allows people to match their investment horizon with their financial objectives.

2. Minimum Deposit Requirement: 

Banks generally require a minimum amount to be deposited to open a fixed deposit account. The least amount may change among different institutions and is essential for investing in FDs.

3. Fixed Interest Rate: 

The interest rate offered on a fixed deposit is determined when one opens the FD account and does not vary through the holding period that one selects. This aspect guarantees that investors are always aware of the returns they will receive when investing, thus giving an element of certainty and stability.

4. Premature Withdrawal: 

Although fixed deposits have a predetermined lock-in period, some banks allow for an early withdrawal in the case of emergencies. Yet, premature redemption may lead to fines or a lower interest rate an individual earns based on the bank’s terms and conditions.

5. Frequency of Interest Payment: 

Investors also have the option to decide how often they will receive their highest FD interest rate payments. Individuals may receive interest monthly, quarterly, semi-annually, or annually, according to their preferences and financial situation.

6. Nomination Facility: 

With fixed deposits, a nomination facility enables account holders to specify a nominee. However, in the event of the account holder’s death, funds will go to a nominated individual, making inheritance simple and asset transition smooth.

7. Joint Fixed Deposit: 

Investors can consider opening a joint fixed deposit account with another individual who may be their business partner, spouse, or relative. This shared ownership promotes flexibility and convenience as several parties can contribute to and profit from the fixed deposit.

Benefits Of Investing In Fixed Deposits

1. Stability:

First, stability is a key strength of fixed deposits. FDs are known as low-risk investments because they have a fixed highest FD interest rate and the principal amount, which is typically guaranteed. This stability is quite appealing to conservative investors who value maintaining their capital stability.

2. Predictable Returns:

The fact that the interest rate is constant makes it possible for investors to correctly anticipate their returns. This predictability allows for precise financial planning, making it possible to tailor an individual’s investment strategy to specific future financial targets. Through the provision of knowing the exact returns in advance, security is added to the investment.

3. Liquidity:

Although fixed deposits are usually thought of as less liquid than some other types of investments, most banks allow premature withdrawals. During a crisis or unexpected financial demand, investors can withdraw their money before maturity. But it is also important to mention that premature withdrawals levy penalties and loss of the earned highest FD interest rate.

4. Flexibility of Tenure:

Fixed deposits have a variety of periods, from seven days to ten years. This flexibility enables the investors to customise their investment period based on liquidity requirements and financial goals. FDs, however, appeal to all types of investment interests, whether one opts for short-term benefits or a long-term venture.

5. Loans Against Fixed Deposits:

Multiple banks offer the feature of getting loans by pledging fixed deposits. This aspect becomes helpful when people need money yet refuse to redeem their FDs prematurely. As collateral, the value of the fixed deposit enables investors to conveniently secure liquidity without placing the investment at risk.

6. Tax Benefits:

The interest received from the fixed deposits qualifies for tax. Section 80C of the Income Tax Act allows investors to reduce up to Rs. 1.5 lakhs from their taxable income every year. This tax reduction not only helps attract investment but also strengthens the investment’s overall tax efficiency, making it a desirable choice for those who want to maximise their profits while minimising taxes.

Conclusion

We have mentioned some of the banks that offer the highest FD interest rates. Fixed deposits not only provide a secure investment way for your savings but also offer excellent returns, allowing you to achieve new financial heights. Investors must make their decisions wisely and choose the bank accordingly. With the trusted investment platform Wint Wealth, you can make the right decision for your future and reach the heights of financial growth.