Fixed deposits or FDs are among the simplest and safest ways of growing your hard earned money. FDs have been a trusted choice of investors for various reasons such as being low risk while offering guaranteed returns, and capital preservation. They are also easy to operate. You can open an FD account at banks and non-banking financial institutions across India. They are especially preferred by risk averse investors like senior citizens, who view them as a secure avenue to grow savings.
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Fixed deposits are low-risk investments. Unlike other products, such as stocks or mutual funds, the principal amount that you invest in an FD is not subject to market fluctuations, thus making them a stable and secure investment. That is why they make an attractive choice for conservative investors who prioritize capital preservation.
Fixed deposits are straightforward and easy to understand. You deposit a specific amount for a set period, at a predetermined interest rate. It does not involve complex calculations or market analysis. The simplicity it offers in terms of calculating returns, makes FDs accessible to a wide range of investors, including those with limited financial knowledge.
In the past, FDs did lose some of their appeal due to dipping interest rates. However, the rate hikes in the last year have certainly reignited people’s interest in FDs, something which recent RBI data also reflects.
The size of an average bank FD is just over Rs.42,500. Delhi and Maharashtra emerge at the top in terms of average deposit amounts compared to other states in the country. Delhi tops the list of the average deposit amount which hovers around Rs.80,000, followed by Maharashtra where the average deposit is hovers above Rs.73,000. Southern states weigh heavily on both volumes and averages, while north-east states like Mizoram and Sikkim are punching above their weight in terms of averages.
Another benefit that adds to the appeal of FDs is that they are insured by government-backed Deposit Insurance and Credit Guarantee Corporation. This provides an additional layer of security for depositors, whose deposits up to a certain amount, are insured.
If you are considering investing in fixed deposits or a term of 3-5 years, take a look at the 10 banks offering the highest interest rate.
| Bank Name | Highest Advertised Interest Rate On 3 to 5 Years FDs |
| Suryoday Small Finance Bank | 9.1 |
| Fincare Small Finance Bank | 8.25 |
| DCB Bank | 7.75 |
| AU Small Finance Bank | 7.5 |
| Equitas Small Finance Bank | 7.5 |
| IndusInd Bank | 7.5 |
| Bandhan Bank | 7.25 |
| HDFC Bank | 7.25 |
| Jana Small Finance Bank | 7.25 |
| Yes Bank | 7.25 |
