Fixed deposits (FDs) are again becoming popular following the repo rate hikes announced by the RBI starting May 2022 to arrest spiralling inflation. FDs are currently offering returns as high as 8%, as a result of which investors who want capital protection and appreciation are reconsidering them to save their hard-earned money.
Fixed or term deposits are low-risk saving options where you can invest a certain amount of capital for a fixed tenure at a predetermined interest rate. Since they are unaffected by market fluctuations, they are considered a low-risk investment. FD interest rates are usually higher compared to a savings bank account. However, they may vary depending on the bank and the FD tenure, which ranges from 7 days to 10 years. After the FD matures, the investor can either withdraw the sum or re-invest it into another FD.
If you withdraw from the FD before it matures, you may incur a penalty or forfeit some or all of the interest earned thus far. Since FD rates may differ between banks, it is prudent to compare the rates offered by different financial institutions before investing. If you plan to invest in a 1-2 year FD, explore the interest rates that government and private banks offer.
Read More: World Bank Pledges $1 Billion Loan To Support India’s Ayushman Bharat Health Infra Mission
| Bank Name | Interest Rate For 1-2 years’ Regular FDs (in %) |
| PUBLIC SECTOR BANKS | |
| Bank of Maharashtra | 6.75 |
| Bank of Baroda | 7.05 |
| Bank of India | 7.05 |
| Canara Bank | 7.15 |
| Central Bank of India | 7.35 |
| Indian Bank | 7 |
| Indian Overseas Bank | 7 |
| Punjab National Bank | 7.25 |
| Punjab & Sind Bank | 7.25 |
| State Bank of India | 7.1 |
| UCO Bank | 7.15 |
| Union Bank | 7.25 |
| PRIVATE SECTOR BANKS | |
| Axis Bank | 7.26 |
| Bandhan Bank | 8 |
| Catholic Syrian | 7 |
| City Union Bank | 7.75 |
| DCB Bank | 7.85 |
| Dhanlaxmi Bank | 7.25 |
| Federal Bank | 7.25 |
| HDFC Bank | 7.1 |
| ICICI Bank | 7.1 |
| IDBI Bank | 7.25 |
| IDFC First Bank | 7.75 |
| IndusInd Bank | 7.5 |
| J & K Bank | 7.25 |
| Karnataka Bank | 7.5 |
| Kotak Bank | 7.2 |
| Karur Vysya Bank | 7.5 |
| RBL Bank | 7.8 |
| South Indian Bank | 7.4 |
| Tamilnad Mercantile Bank | 7.25 |
| TNSC Bank | 7.5 |
| Yes Bank | 7.5 |
Disclaimer: Data as on respective banks’ websites on Mar 3, 2023 . The maximum offered interest rate has been considered for 1-2 years range. All interest rates are for normal fixed deposits amounting to less than Rs.1 crore.
