What is Fixed Deposit (FD)?
A fixed deposit (FD), also known as a term deposit or time deposit, is a safe investment option offered by banks and other financial institutions.

Updated On – 14 Jan 2025

It allows you to deposit a lump sum of money at a fixed interest rate for a predetermined amount of time and earn assured returns. You are not permitted to withdraw money during this period without paying a penalty.

Generally, FDs have higher interest rates than standard saving accounts. People seeking a guaranteed return on their investment with minimal risk often opt for fixed deposits.

Top Bank FD Interest Rates in India for 2025

The latest interest rates offered by top banks for terms ranging from seven days to 10 years as of December 2025 are listed in the table below: 

Note: The interest rates mentioned in the table above may change at the discretion of the bank.

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FD Interest Rates – 1 Year and 3 Years

Note: The interest rates mentioned in the table above may change at the discretion of the bank.   

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FD Interest Rates – 5 Years and Up to 10 Years

Note: The interest rates mentioned in the table above may change at the discretion of the bank.     

Check – RD Interest Rates

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Key Highlights of the FD Interest Rates

• Compared with regular savings accounts, FDs typically offer better interest rates.
• All resident Indians, including minors and HUFs, are eligible to open an FD account.
• It permits designating two nominees on the application form who, upon the account holder’s death, are qualified to receive the FD amount.  Nominees must submit legitimate proof of the the account holder’s death.
• In the event of an emergency, you can withdraw your fixed deposit prematurely by paying a penalty.
• Banks offer sweeping savings for term deposits, enabling depositors to link fd accounts to their savings accounts. This facility’s advantage is that it makes it easier for excess funds to be automatically transferred from savings accounts to fixed deposit accounts. It allows depositors to earn fixed deposit interest rates on their savings accounts while also having the option to withdraw the fd at any time.

FD Rates for Senior Citizens

Generally, interest rates offered by banks to senior citizens are marginally higher than those provided to the general public. However, proof of age is required to open a senior citizen account and receive benefits.

A senior citizen must be 60 years of age or older when they open an account. In most banks, senior citizens’ fd tenure varies from seven days to 10 years. A senior citizen can obtain loans against their senior citizen fd account at an interest rate  between 0.25% and 0.75% higher than the standard interest rate. Premature withdrawals in the case of a senior citizen’s fd account also attract a penalty. Check Your Credit Score for FREE

Features of Fixed Deposits

 Fixed deposit features may differ slightly depending on the bank or other financial institution and the particular terms and conditions provided by them. Some of the features are given below:

• Low Minimum Deposit: You can open an FD with as little as Rs. 100, though this amount may vary between banks and NBFCs. 
• Fixed Tenure: FDs can be opened for durations ranging from 7 days to 10 years. 
• Fixed Interest Rates: Interest rates are locked in for the FD’s tenure, but some banks offer floating rate schemes where the interest rates are linked to external benchmarks like the repo rate. 
• Flexible Interest Payouts: Choose from monthly, quarterly, half-yearly, or yearly payouts, or opt for a cumulative option where interest is reinvested to benefit from compounding. 
• Premature Withdrawal: You can withdraw funds before maturity, though a penalty may apply. 
• Loan Against FD: Use your FD as collateral to avail of a loan while still earning interest on the pledged amount. 

Benefits of Fixed Deposit

• Guaranteed Returns: FDs offer assured returns, regardless of market fluctuations. 
• Insurance Coverage: Deposits up to Rs. 5 lakh are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). 
• Tax Benefits: Earn tax deductions of up to Rs. 1.5 lakh under Section 80C on tax-saving fixed deposits. 
• Collateral for Loans: FDs can be used as collateral to secure loans or obtain secured credit cards. 

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Types of Fixed Deposits

Fixed Deposit (FD) schemes are designed to meet the needs of different user groups. Below are the various types of Fixed Deposits (FD) to help you maximise your savings: 

• Standard Fixed Deposit: Available to Resident Indians, Sole Proprietorship Firms, Partnership Firms, Limited Companies, and Hindu Undivided Families (HUFs), this deposit offers higher interest rates than regular savings accounts. 
• Tax-saving Fixed Deposit: Available only to Resident Individuals and HUFs, this FD allows a tax deduction of up to Rs. 1.5 lakh under Section 80C and has a 5-year lock-in period. 
• Floating Rate Fixed Deposit: The interest rate is tied to a reference rate, such as the RBI’s Repo Rate or T-Bill Rate, meaning returns vary based on changes in the reference rate. 
• Flexi Fixed Deposit: This type of FD links with a savings or current account. In case of insufficient funds, a portion of the deposit can be withdrawn while the remaining amount continues to earn FD interest, offering more liquidity and flexibility. 
• Senior Citizen Fixed Deposit: For individuals aged 60 and above, offering interest rates 50 bps higher than regular FDs. Some banks and NBFCs also offer an additional 0.2% p.a. to 0.3% p.a. for specific tenures, with special rates for super senior citizens (80+ years). 
• Corporate Fixed Deposit: Offered by Housing Finance Companies (HFCs) and Non-Banking Financial Companies (NBFCs), typically providing higher interest rates than bank FDs. 
• Cumulative Fixed Deposit: Interest is compounded and added to the principal, offering the benefits of compound growth over time. 
• Non-cumulative Fixed Deposit: Interest is paid out at regular intervals—monthly, quarterly, half-yearly, or annually—depending on the depositor’s preference. 
• Callable Fixed Deposit: Allows premature withdrawal before maturity but may incur a penalty for early closure. 
• Non-callable Fixed Deposit: Withdrawals can only be made at maturity, with higher interest rates compared to callable FDs. 

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Types of Fixed Deposits for NRIs

• Non-resident External (NRE) Deposit: Ideal for NRIs and Persons of Indian Origin (PIOs) to deposit their foreign earnings. 
• Non-resident Ordinary (NRO) Deposit: Suitable for NRIs and PIOs to deposit income earned from Indian sources. 
• Foreign Currency Non-resident (FCNR) Deposit: Allows NRIs and PIOs to deposit funds earned overseas in foreign currency, helping avoid exchange rate risks. 
• Resident Foreign Currency (RFC) Deposit: Designed for NRIs and PIOs returning to India after living abroad for at least a year, allowing them to open foreign currency fixed deposits without exchange rate risks. These deposits must be funded with overseas earnings. 

Eligibility Criteria for FD

The following are eligible to open a fixed deposit account in India: 

• Residents 
• Hindu undivided families 
• NRI 
• Minors 
• Senior citizens 
• Companies 
• Individuals or joint investors 
• Societies or clubs 
• Sole proprietorship 
• Partnership firms 
• Trust accounts 

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Documents Required to Open a Fixed Deposit (FD)

• The documents required for various entities are mentioned below:
  Existing Customers – If you already have an account with a bank, you might not need to bring all the required paperwork to open an FD account. The bank will require a copy of your Know Your Customer (KYC) documents and recent passport-sized photographs. 
  New Customers 
• KYC Documents – PAN/Aadhaar card/Voter ID/Passport
• Recent passport-sized photographs 
  Hindu Undivided Family
• HUF deed and declaration  
• KYC documents  
• PAN card  
• Recent passport-sized photographs 
  Public/Private Limited Company
• Company PAN card  
• Latest utility bills  
• Board resolution to open FD   
• Bank account statement  
• Recent passport-sized photographs  
• Registration or incorporation certificates  
• KYC of authorised signatories  
  Partnership Firm 
• PAN card  
• Registration certificate  
• KYC of all the authorised signatories  
• Recent passport-sized photographs  
• Partnership deep 
  Statutory Board /Local Authority  
• PAN card  
• Latest utility bills  
• Bank account statement  
• Certificate of registration/incorporation  
• KYC of all the authorised signatories  
• A copy of the ministry’s or government authority’s permission  
• Recent passport-sized photographs
  Registered Societies
• Board resolution to open FD  
• PAN card  
• KYC of all the authorised signatories  
• Latest utility bills  
• Bank account statement  
• Recent passport-sized photographs  

• Certificate of registration/incorporation  
• Articles & memorandum of association
  Trusts
• Board resolution to open FD  
• Copy of trust deed  
• Registration certificate  
• Recent passport-sized photographs 

Statutory Board /Local Authority

• PAN card  
• Latest utility bills  
• Bank account statement  
• Certificate of registration/incorporation  
• Copy of the ministry’s or government authority’s permission  
• KYC of all the authorised signatories  
• Recent passport-sized photographs 

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How to Open Fixed Deposit Online?

Here is how you can open a fixed deposit account online: 

Step 1: Visit the bank’s official website to initiate the process. 

Step 2: Log in to your bank account if you already have one. Otherwise, create a new account. 

Step 3: Navigate to the ‘Fixed Deposit’ option. 

Step 4: Complete all mandatory fields, including tenure, amount, nominee, and digital signatures. 

Step 5: Upload all the necessary documents. 

Step 6: Verify all of the information and submit it. 

Step 7: Make the payment through internet banking. 

Step 8: Keep the receipt for future use. 

How to Open Fixed Deposit Offline?

To open an FD account offline, follow the steps mentioned below: 

Step 1: Visit the bank and request a fixed deposit opening form. 

Step 2: Complete the application  form with accurate details including the amount and tenure. 

Step 3: Submit the requested documents and the completed application form to the bank. 

Step 4: Provide the desired amount to invest in the fixed deposit account in cash or by cheque. 

Step 5: The bank will process your application and open your FD account.Check Your Credit Score for FREE

Renewals and Withdrawals of Fixed Deposits

FDs are a favoured investment avenue for Indians, subject to renewal and withdrawal. This applies across all types of term deposits, whether held in banks or Non-Banking Financial Companies (NBFCs). For instance, suppose you initiate an FD for Rs. 3 lakh for a 10-year term at a rate of 10%. After the 10-year tenure, you must either renew or withdraw the deposit. 

Renewals

• Upon maturity, an FD can be renewed for the same duration if desired. 
• If maturity instructions are provided, the FD may be auto renewed for the same term at the prevailing interest rate. 
• It’s crucial to monitor FDs to avoid inadvertent lapses in renewal, as auto-renewal may occur at potentially lower interest rates. 

Withdrawals

• At maturity, the principal amount, along with the accrued interest, can be withdrawn. 
• The auto-termination feature closes the FD on maturity and transfers the funds to a designated savings account. 
• Auto-termination may result in lower reinvestment rates due to market fluctuations. 
• Withdrawals before maturity may incur penalty charges, although this option is available. 

Key Terms

• Withdrawal – The retrieval of the principal amount and interest upon FD maturity. 
• Renewal – The extension of an FD for the same tenure upon maturity. 
• Auto-withdrawal – Automatic transfer of maturity proceeds to the savings account. 
• Auto-renewal – Automatic renewal of the FD for the same term and prevailing interest rate. 
• Premature withdrawal – Retrieval of funds before maturity, subject to penalty charges. 

Credit Score

• Renewal of FDs can impact credit scores positively by showcasing financial stability. 
• Withdrawal before maturity may not directly influence credit scores but can affect overall financial planning. 
• Careful consideration should be exercised when deciding whether to renew or withdraw FDs, ensuring optimal benefits are obtained. 

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FD Calculator

A fixed deposit calculator is a free online tool that assists people in estimating the amount they will receive as a maturity payout on their investment. It is simple to use and will make it easier to compare different tenures and interest rates offered by different banks. Thus, you can choose the bank and tenure that will give you the best returns when your fixed deposit matures. 

The entire calculation process is simple and hassle-free. To calculate the maturity amount, you need to enter the deposit term, tenure, and interest rate, and choose the type of fixed deposit.  

Check – RD Calculator

Income Tax Exemptions on Fixed Deposits

• The income you earn on your FD is termed as Income from Other Source and it is fully taxable.
• Banks will not deduct TDS, if your interest income from fixed deposits is less than Rs.40,000 in a year.
• You need to submit Form 15G and Form 15H to the bank at the beginning of the financial year. Banks will not deduct TDS following the form submission.

How to Choose the Right Fixed Deposit?

Here are the factors to look in when opting to invest in FDs:

1. Compare the FD interest rates of different banks.
2. Review the credibility of the lender by examining the fixed deposit’s safety rating as given by ICRA or CRISIL.
3. Choose whether you want a cumulative or non-cumulative fixed deposit.
4. Choose a bank that offers good customer service and a hassle-free process for opening an FD.

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Difference Between Fixed Deposit (FD) vs Recurring Deposit (RD)

The following is the list of significant differences between Fixed Deposit (FD) and Recurring Deposit (RD):

Fixed Deposit, also known as Term Deposit, is an investment option where investors keep their deposit for a fixed duration in the deposit account of a particular financial institution. The interest earned depends on the duration of the deposit amount and varies according to the tenor.

When it comes to recurring deposits, investors can deposit a fixed amount every month and can earn interests. The interest is paid along with the capital at maturity.

In short, While both RD and FD runs over a tenure, FD investors can deposit an amount once while RD investors must deposit a fixed amount at regular intervals.Check Your Credit Score Now

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FAQs on FD Interest Rates

1. What is the minimum lock-in period for a tax-saving fixed deposit?  Tax-saving FDs have a five-year lock-in period.
2. What are the tenure options to open an FD account? FD schemes typically have a duration of seven days to 10 years. However, HFCs provide tenures ranging from 12 months to 120 months, while NBFCs offer investments for periods spanning 12 months to 60 months.
3. What is the minimum deposit required to book an FD? Usually, banks and NBFCs set a minimum opening deposit amount of Rs.1,000. While some major private sector banks have a minimum deposit amount of Rs.5,000, public sector banks can have lower minimum deposit requirements. 
4. What is the difference between NRO FD and NRE FD? Non-Resident Ordinary (NRO) FD is a type of fixed deposit used by NRIs for managing their income earned in India. NRE FDs allow non-resident Indians to send their overseas earnings to an Indian account.
5. Who is eligible to invest in a fixed deposit in India? All resident individuals, partnerships, governments, local bodies, Hindu Undivided Families (HUF), private and public limited companies, societies, etc can open a fixed deposit in India.
6. Is FD a good investment? Investing in fixed deposits is one of the safest investment options available. The interest offered on FDs by banks makes it a good option.
7. Is interest on a fixed deposit subject to taxes? Yes, interest income from a fixed deposit is subject to taxation. However, you are allowed to deduct up to Rs.1.5 lakh per financial year under Section 80C of the Income Tax Act, 1961.
8. Is submitting a PAN required in order to open a fixed deposit? Yes, in order to apply for a fixed deposit, you must provide your PAN. If you do not have a PAN, you must submit Form 60/61 (if you are not a company or a firm). 
9. What is an NRE fixed deposit? Non-Resident External (NRE) Fixed Deposit is used by NRIs to deposit their foreign earnings in an Indian account. In India, interest received on NRE FDs is not subject to taxation. The account is kept in Indian rupees, which implies that any funds deposited are converted at the current exchange rate.
10. Can I receive monthly interest on my FD?  Yes, this option is available for non-cumulative fixed deposits.
11. Does premature withdrawal reduce fixed deposit earnings?  Yes, premature closure carries a penalty of up to 1%. This penalty is applied to the effective rate of interest, lowering your earnings.
12. Can minors open a fixed deposit account?  Yes, when applying for a fixed deposit, minors can do so through a parent or guardian as a co-applicant. When a minor (those over 10 years old) opens a Post Office Fixed Deposit or Post Office Time Deposit, a legal guardian can manage the account until the minor turns 18 years old.
13. How will I receive the FD maturity amount? The maturity amount will be credited by the bank to the linked savings account held with the bank, which includes the principal and interest amounts. If you do not hold a savings account with that particular bank, you can give them instructions on how you want to get the maturity value.

News about Fixed Deposit Interest Rates

Interest rates for fixed deposit schemes increased to 9.50%

The fixed deposit interest rates have been revised by many Indian banks and has been increased to 9.50%. YES Bank has revised the FD rates and ranges between 3.25 to 8.00% and 3.75% to 8.50% for regular and senior citizens respectively. The interest rates have been revised by Unity Small Finance Bank (SFB) ranging from 4.50% to 9% for general citizens for deposit tenure ranging from seven days to 10 years. For FD tenures ranging from seven days to 10 years fixed deposit interest rate between 3.50% and 7.99% for general citizens after IndusInd Bank revises the FD rates. As per the revised rates of DCB Bank, the FD interest rates for general citizens and senior citizens stand at 8.00% and 8.55% in tenure from 19 months to 20 months. 

As per the new rates, the IDFC FIRST Bank offers interest rates ranging between 3.00% to 7.90% and 3.50% to 8.40% for general and senior citizens, respectively for tenures ranging between seven days to 10 years. State Bank of India has also raised the FD rates for retail and bulk deposits which are effective from 15 May 2024. Utkarsh Small Finance Bank revised its fixed deposit interest rates from 4.00% to 8.50% and 4.60% and 9.10% for general citizen and senior citizens, respectively. 

On FDs maturing between 18 and 24 months, RBL Bank is offering interest rates at8.00%, 8.50%, and 8.75% for general, senior and super senior citizens, respectively. Capital Small Finance Bank has revised fixed deposit interest rates and the new rates range between 3.50% to 7.55% and 4.00% to 8.05% for general and senior citizens, respectively. City Union Bank has also revised fixed deposit interest rates and for general and senior citizens the new rate ranges between 5.00% to 7.25% and 5.00% to 7.75%, respectively. 

Courtsey To : Bankbazaar

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Maria Stanly

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