How to find the best FD rates in India 2024

By Neha Roy Jan 29, 2024 #fd rates #tax saving fd
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In personal finance, Fixed Deposits (FDs) continue to be a popular and secure investment option for many individuals. As we enter 2024, finding the best FD rates becomes important for those seeking stable returns. This post explores the factors influencing FD rates, the top banks offering competitive rates, and essential tips for maximising your returns.

Understanding Fixed Deposits

A Fixed Deposit (FD), also known as a ‘time deposit’ or ‘term deposit,’ stands as a steadfast investment option where individuals can secure their surplus funds for a specific period, earning fixed interest at regular intervals or upon maturity. This financial instrument guarantees income certainty and capital protection, rendering it particularly attractive to novice and risk-averse investors. 

The appeal of fd rates lies in their ability to provide a stable avenue for realising short-term financial goals, as well as serving as a secure parking space for emergency funds and post-retirement savings. With its reliability and ease of understanding, an FD emerges as a cornerstone in financial planning, offering a balance between assured returns and capital preservation.

Benefits of Investing in FD

Investing in Fixed Deposits (FDs) offers a variety of benefits, making it a favoured choice among investors for its stability and financial advantages.

Assured Returns:

FDs provide assured returns on investment with fixed interest rates known at the time of opening the account. This rate remains consistent throughout the chosen tenure, ensuring a degree of income certainty. This predictability surpasses that offered by many small saving schemes.

Capital Protection:

Tax-saving FDs with scheduled banks are safeguarded by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI. In the unfortunate event of a bank failure, the insurance program covers cumulative bank deposits, including FDs, up to Rs 5 lakh per depositor per bank, ensuring capital protection.

Tax Deduction under Section 80C:

Many banks and NBFCs provide a 5-year tax-saving FD scheme with a lock-in period of 5 years. Investors can claim tax deductions of up to Rs 1.5 lakh per financial year under Section 80C of the Income Tax Act for the principal component. However, the interest earned is taxable based on the depositor’s applicable tax slab.

Loan Against Fixed Deposits:

FDs can be utilised as collateral for obtaining loans through overdraft facilities. This allows depositors to borrow against the FD amount, with interest levied only on the drawn amount. The borrower continues to earn interest on the pledged FDs during the loan tenure, providing a solution for liquidity and cash flow mismatches without prematurely closing FDs.

Credit Card Against Fixed Deposits:

Individuals with limited credit history can leverage their FDs to obtain secured credit cards. These cards can be used as you would any card. What’s more, these cards can also help build a credit score.  

Factors Influencing Fixed Deposit Rates

Fixed Deposit interest rates are influenced by various factors that determine the returns on your investment. Understanding these factors is crucial for making informed decisions about your FD portfolio.

FD Tenure:

The chosen tenure plays a pivotal role in determining FD interest rates. Generally, banks offer higher rates for longer tenures. For example, ICICI Bank provides a flexible tenure range from 7 days to up to 10 years.

Invested Amount:

The amount invested is a key factor affecting interest rates. Banks often categorise FD amounts, and interest rates vary accordingly.

Your Age:

Age is a determinant, with many banks offering higher rates to senior citizens.

 Economic Conditions:

The overall economic scenario, including fiscal and monetary policies, significantly impacts FD rates. Inflation trends influence interest rates, with higher inflation typically leading to increased FD rates.

Repo Rate Fluctuations:

Changes in the repo rate, the rate at which the RBI lends money to commercial banks, directly impact FD rates. Rising repo rates generally result in higher FD rates, while consistently lowered repo rates may lead to lower FD rates.

Top Banks Offering Competitive FD Rates in 2024

Bank Name Highest Slab Interest Rates (%) 1-year Tenure Interest Rates (%) 3-year Tenure Interest Rates (%) 5-year Tenure Interest Rates (%)
ICICI Bank 7.10 6.70 7.00 7.00
Axis Bank 7.10 6.70 7.10 7.00
Bandhan Bank 7.85 7.25 7.25 5.85
City Union Bank 7.00 6.75 6.50 6.25
CSB Bank 7.75 5.00 5.75 5.75
DBS Bank 7.50 7.00 6.50 6.50
DCB Bank 8.00 7.15 7.60 7.40
Dhanlaxmi Bank 7.25 6.75 6.50 6.60
Federal Bank 7.50 6.80 7.00 6.60
HDFC Bank 7.20 6.60 7.00 7.00

Tips for Maximising FD Returns

  1. Focus on Yields:

While interest rates are crucial, examining the yields is equally vital. Some schemes compound interest annually, while others do so quarterly. Opting for quarterly compounding can result in higher overall yields, making it imperative to scrutinise this aspect when selecting an institution for your FD account.

  1. Explore Beyond Banks:

Consider alternatives beyond traditional bank FDs. Company FD schemes often offer significantly higher interest rates. Prioritise comparing these options to ensure your investment yields the maximum returns available.

  1. Consider Cumulative FDs:

Choose between cumulative and non-cumulative FDs based on your financial goals. Cumulative FDs provide compound interest at the end of the tenure, enhancing overall returns. Non-cumulative FDs, on the other hand, offer periodic interest payouts, catering to those seeking regular income.

  1. Diversify with Multiple FD Schemes:

Enhance liquidity and ensure consistent returns by investing in multiple FD schemes. Break down your investment into fractions and allocate them to various schemes with different tenures, creating a diversified investment portfolio.


Finding the best FD rates in India for 2024 requires a strategic approach. By understanding the factors influencing rates, exploring offerings from top banks, and implementing tips to maximise returns, investors can make informed decisions to secure their financial future. The key lies in aligning your investment strategy with your unique financial goals.

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