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There are two primary types of investment options available to investors: market-linked and non-market-linked investments. Understanding the difference between them is important. Market-linked investments typically offer higher returns but come with greater risk, as their performance depends on market conditions. If the market underperforms, the returns may suffer. In contrast, non-market-linked investments are not tied to the performance of stocks or equities, providing guaranteed returns with lower risk.
Fixed deposits (FDs) are a safe, non-market-linked investment option that guarantees returns on your savings. Investors can make a one-time deposit and receive interest either on maturity or at regular intervals such as monthly, quarterly, half-yearly, or yearly, depending on the bank’s terms. Major banks like State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, HDFC Bank, and ICICI Bank offer FDs with varying durations and frequently update their interest rates. In this blog, we will explore the latest FD rates from these leading banks to help you make informed decisions.
1. State Bank of India (SBI) FD Interest Rates
Here are the detailed interest rates offered by SBI for Fixed Deposits (FDs):
- 1-Year FD:
- SBI offers an interest rate of 6.80% on fixed deposits with a tenure of 1 year.
- 3-Year FD:
- For a tenure of 3 years, SBI provides an interest rate of 6.75%.
- 5-Year FD:
- Fixed deposits with a 5-year tenure attract an interest rate of 6.50%.
2. Punjab National Bank (PNB) FD Interest rates
- 1-Year FD:
- PNB offers an interest rate of 6.80% for fixed deposits with a 1-year tenure.
- 3-Year FD:
- For a 3-year tenure, PNB provides a higher interest rate of 7.00%.
- 5-Year FD:
- Fixed deposits with a tenure of 5 years offer an interest rate of 6.50%.
3. Canara Bank FD Interest Rates
Here are the detailed interest rates offered by Canara Bank for Fixed Deposits (FDs):
- 1-Year FD:
- Canara Bank offers an interest rate of 6.85% for fixed deposits with a tenure of 1 year.
- 3-Year FD:
- For a 3-year tenure, Canara Bank provides an interest rate of 6.80%.
- 5-Year FD:
- Fixed deposits with a 5-year tenure come with an interest rate of 6.70%.
4. HDFC Bank FD Interest Rates
Here are the detailed interest rates offered by HDFC Bank for Fixed Deposits (FDs):
- 1-Year FD:
- HDFC Bank offers an interest rate of 6.60% for fixed deposits with a tenure of 1 year.
- 3-Year FD:
- For a 3-year tenure, HDFC Bank provides a higher interest rate of 7.00%.
- 5-Year FD:
- Fixed deposits with a 5-year tenure also offer an interest rate of 7.00%.
5. ICICI Bank Interest Rates
Here are the detailed interest rates offered by ICICI Bank for Fixed Deposits (FDs):
- 1-Year FD:
- ICICI Bank offers an interest rate of 6.70% for fixed deposits with a 1-year tenure.
- 3-Year FD:
- For a 3-year tenure, ICICI Bank provides a higher interest rate of 7.00%.
- 5-Year FD:
- Fixed deposits with a 5-year tenure also offer an interest rate of 7.00%.
To provide you better understanding here’s a table summarizing the Fixed Deposit (FD) interest rates offered by SBI, PNB, Canara Bank, HDFC Bank, and ICICI Bank for 1-year, 3-year, and 5-year tenures:
| Bank | 1-Year FD | 3-Year FD | 5-Year FD |
| SBI | 6.80% | 6.75% | 6.50% |
| PNB | 6.80% | 7.00% | 6.50% |
| Canara Bank | 6.85% | 6.80% | 6.70% |
| HDFC Bank | 6.60% | 7.00% | 7.00% |
| ICICI Bank | 6.70% | 7.00% | 7.00% |
Factors to be Considered for FD Investment
1.Early Withdrawal: Many banks allow early withdrawal of fixed deposits, but it mostly comes with a penalty and a reduced interest rate that varies across banks. While some banks waive off the penalty amount after a certain period, so it’s important to check the specific terms before making an early withdrawal.
2.Tax Benefits: Certain 5-year tax-saving fixed deposits offer tax benefits under Section 80C of the Income Tax Act, allowing deductions up to ₹1.5 lakh per year. However, the interest earned is taxable, so consider the overall tax impact.
3. Senior Citizen Benefits – Banks generally offer higher interest rates (0.25% to 0.50% more) on FDs for senior citizens. These rates apply to various tenures, making it a safe and flexible investment for retirees.
4.Loan Against FD: Banks allow loans of up to 90% of your FD value, providing liquidity without breaking the FD. The loan interest rate is typically lower than personal loans or credit card debt, making it a cost-effective borrowing option.
5.Interest Payout Options: FDs offer flexible interest payout options, including monthly, quarterly, half-yearly, or annual payments. You can also choose to receive interest at maturity for compound growth.
6. Auto-Renewal: Banks often auto-renew FDs upon maturity unless instructed otherwise. Keep track of renewal terms as the interest rate may change.
7. Nominee Facility: FD accounts include a nomination option, allowing you to name a beneficiary who will receive the funds in case of your demise, avoiding legal complications.
Eligibility Criteria for Fixed Deposits
- Residents
- Hindu Undivided Families (HUFs)
- Sole Proprietorship Firms
- Partnership Firms
- Limited Companies
- Trust Accounts, among others.
FD Interest Rate Calculator
If you’re curious about the interest you’ll earn on your fixed deposit at maturity, you can easily calculate it using an online FD calculator. This tool will show you the total interest accumulated by the end of the tenure. Alternatively, you can use the following formula:
A = P * (1+ r/n) ^ n*t
Where:
I = A -P
A = Maturity Amount
P = Principal Amount
R = Rate of Interest
T = Tenure
N = Frequency of Compounding
I = Interest earned
Final Thoughts
Selecting the right fixed deposit tenure and bank can greatly impact your returns. Public sector banks such as SBI and PNB offer stability and slightly higher rates for senior citizens, while private sector banks like HDFC and ICICI deliver competitive returns with additional features. Stay informed about the latest FD rates, as banks frequently adjust them based on market conditions and monetary policy changes. Make sure to choose an FD that fits your financial goals and liquidity requirements for the best outcomes.
