Fixed deposits or FDs are secure financial instruments, which offer guaranteed returns.
FD interest rates vary according to the tenure of the fixed deposit and across banks.
In a fixed deposit account, money is deposited for a specific time, which varies from 7 days to ten years.
Some fixed deposits come with a premature withdrawal facility while some require a compulsory lock-in period.
Fixed deposit interest rates are also higher than those offered by savings accounts.
Savings accounts offer around 3.5 per cent of interest rate.
Fixed deposits, however, offer much higher interest rates than savings accounts.Here is a comparison of fixed deposit (FD) rates offered by State Bank of India (SBI), Punjab National Bank (PNB), ICICI Bank and HDFC Bank:Fixed deposit (FD) rates offered by State Bank of India (Below Rs.
1 crore):TenorsInterest rate (in per cent) for public w.e.f.
28.05.2018Interest rate for senior citizens w.e.f.
28.05.20187 days to 45 days5.756.2546 days to 179 days6.256.75180 days to 210 days6.356.85211 days to less than 1 year6.46.91 year to less than 2 year6.657.152 years to less than 3 years6.657.153 years to less than 5 years6.77.25 years and up to 10 years6.757.25(Source: sbi.co.in)Fixed deposit (FD) rates offered byPunjab National Bank (PNB)Domestic TD Less Than Rs 1 crore w.e.f.
01.03.2018PeriodROI (% p.a.)For Senior Citizen ROI (% p.a.)7 to 14 days5.76.215 to 29 days5.76.230 to 45 days5.76.246 to 90 days6.356.8591 to 179 days6.356.85180 days to 270 Days6.356.85271 days to less than 1 year6.356.851 year6.67.1above 1 year up to 3 years6.757.25above 3 year up to 5 years6.256.75above 5 years up to 10 years6.256.75(Source: pnbindia.in)Fixed deposit (FD) rates offered by ICICI Bank (Less than Rs.
1 crore):Rate of Interest (% p.a.) w.e.f June 07, 2018TenureGeneral publicSenior Citizen7 days to 14 days44.515 days to 29 days4.254.7530 days to 45 days5.5646 days to 60 days5.756.2561 days to 90 days66.591 days to 120 days66.5121 days to 184 days66.5185 days to 289 days6.256.75290 days to less than 1 year6.571 year to 389 days6.67.1390 days to 2 years6.757.252 years 1 day up to 5 years77.55 years 1 day up to 10 years77.55 Years Tax saver FD (Max up to Rs.
1.50 lac)77.5(Source: icicibank.com)Fixed deposit (FD) rates offered by HDFC Bank (Less than Rs.
1 crore):Rate of Interest (% p.a.) w.e.f July 6, 2018TenureInterest rate for general publicInterest rate for senior citizen7 - 14 days3.50%4.00%15 - 29 days4.25%4.75%30 - 45 days5.75%6.25%46 - 60 days6.25%6.75%61 - 90 days6.25%6.75%91 days - 6 months6.25%6.75%6 months 1 day- 6 months 3 days6.35%6.85%6 months 4 days6.35%6.85%6 months 5 days- 9 months6.40%6.90%9 months 1 day- 9 months 3 days6.40%6.90%9 months 4 days6.40%6.90%9 months 5 days - 9 months 15 days6.40%6.90%9 months 16 days6.40%6.90%9 months 17 days < 1 Year6.40%6.90%1 Year6.85%7.35%1 year 1 day - 1 year 3 days6.65%7.15%1 year 4 days6.65%7.15%1 year 5 days - 1 Year 15 Days6.65%7.15%1 Year 16 days6.65%7.15%1 year 17 days - 2 Years7.00%7.50%2 years 1day - 2 Years15 days7.00%7.50%2 Years16 days7.00%7.50%2 years17 days - 3 Years7.00%7.50%3 years 1day - 5 years7.00%7.50%5 Years 1 Day - 8 Years6.00%6.50%8 Years 1 Day - 10 Years6.00%6.50%(Source: hdfcbank.com)The fixed deposit accounts which have a lock-in period of five or 10 years also offer income tax benefit under Section 80C of the Income Tax Act.
However, income earned on fixed deposits that is taxable.
Fixed deposit interest is tax-free until a certain threshold, after which it is chargeable.
After the interest earned exceeds Rs.
10,000, tax is deducted at source.
TDS or tax deducted at source is deducted even if the fixed deposit amount has not yet been paid to the customer.