Fixed deposits (FDs) are secure financial instruments that offer guaranteed returns. In a fixed deposit account, money is deposited for a specific time. Most banks today offer a maturity period ranging from seven days to 10 years for fixed deposits. Money deposited in a savings account usually fetches an interest rate to the tune of 3-4 per cent. Fixed deposits, however, offer much higher interest rates compared to savings accounts. Lenders also pay slightly higher interest rates on fixed deposits to senior citizens, compared to those applicable to the general public. Banks keep on revising their FD interest rates from time to time.
Here is a comparison of interest rates paid by State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, ICICI Bank and HDFC Bank on fixed deposits of up to Rs 1 crore:
State Bank of India
Punjab National Bank
Canara Bank
ICICI Bank
HDFC Bank
Some fixed deposits come with a premature withdrawal facility while some require a compulsory lock-in period. The fixed deposit accounts which have a lock-in period of five or 10 years also offer income tax benefit under Section 80C of the Income Tax Act.
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