Bank term deposits or FDs are fixed income instruments with a fixed rate of return.

Bank term deposits or FDs are fixed income instruments that guarantee a fixed rate of return on investments. Bank term deposits should not be confused with corporate term deposits, the returns of which depend on the performance of a business. Leading banks like State Bank of India (SBI), HDFC Bank, ICICI Bank and Yes Bank offer the option of opening a fixed deposit. Nowadays, fixed bank deposits can be created online. Thus, it is convenient for customers to create fixed deposits.

How are FD interest rates determined?
Fixed deposit interest rates vary from bank to bank depending on the length of a fixed deposit. Most banks offer term deposits ranging from seven days to 10 years.

The interest rates on fixed deposits are subject to change from time to time.

How do I get interest payments on fixed deposit investments?
You can opt for monthly, quarterly and annual interest payments. You can also keep the entire amount as well as the fixed interest income to receive the proceeds of your FD investment at maturity.

How to calculate FD interest?
Before creating an FD, you can always check the amount of interest that will accrue on your FD investment. Most banks offer this option on their websites.

FD interest rates offered by SBI, HDFC Bank, ICICI Bank, Yes Bank:

National Bank of India

The following FD interest rates are applicable on deposits below Rs. 1 crore, according to the bank’s website – sbi.co.in:

HDFC Bank

The following FD interest rates apply to deposits below Rs 1 crore as of October 6, according to the bank’s website – hdfcbank.com:

Period
Interest rate (per year)Senior rates (per year)
7 – 14 days3.50%4.00%
15 – 29 days4.25%4.75%
30 – 45 days5.75%6.25%
46 – 60 days6.25%6.75%
61 – 90 days6.25%6.75%
91 days – 6 months6.25%6.75%
6 months 1 day – 6 months 3 days6.75%7.25%
6 months 4 days6.75%7.25%
6 months 5 days – 9 months6.75%7.25%
9 months 1 day – 9 months 3 days7.00%7.50%
9 months 4 days7.00%7.50%
9 months 5 days – 9 months 15 days7.00%7.50%
9 months 16 days7.00%7.50%
9 months 17 days 7.00%7.50%
1 year7.25%7.75%
1 year 1 day – 1 year 3 days7.25%7.75%
1 year 4 days7.25%7.75%
1 year 5 days – 1 year 15 days7.25%7.75%
1 year 16 days7.25%7.75%
1 year 17 days – 2 years7.25%7.75%
2 years 1 day – 2 years 15 days7.10%7.60%
2 years 16 days7.10%7.60%
2 years 17 days – 3 years7.10%7.60%
3 years 1 day – 5 years7.10%7.60%
5 years 1 day – 8 years6.00%6.50%
8 years 1 day – 10 years6.00%6.50%

ICICI Bank

The following FD interest rates apply to deposits below Rs 1 crore, according to the bank’s website – icicibank.com:

Occupation periodInterest rate (% pa) as of August 14, 2018
GeneralSenior *
7 days to 14 days44.5
15 days to 29 days4.254.75
30 days to 45 days5.56
46 days to 60 days5.756.25
61 days to 90 days66.5
91 days to 120 days66.5
121 days to 184 days66.5
185 days to 289 days6.57
290 days to less than 1 year6.757.25
1 year to 389 days6.757.25
390 days to 2 years77.5
2 years 1 day up to 5 years7.257.75
5 years 1 day up to 10 years77.5
5 years of FD tax savings (Max up to Rs. 1.50 lac)7.257.75

Yes Bank

The following FD interest rates are applicable on deposits below Rs 1 crore as of June 5, 2018, according to yesbank.in:

INTEREST RATE ON FIXED DEPOSITS FOR RESIDENTS (% pa) **
PeriodRates for
OrdinarySenior ***
Interest rateInterest rate
7 to 45 days5.00%5.50%
46 to 90 days7.00%7.50%
3 months to 6.90%7.40%
6 months to 6.70%7.20%
9 months to 6.70%7.20%
1 year to 7.10%7.60%
* Special rates
12 months 10 days to
12 months 20 days
7.40%7.90%
18 months 8 days to
18 months 18 days
7.50%8.00%
36 months 10 days to
36 months 20 days
7.25%7.75%

Is FD interest taxable?
Interest income earned on bank term deposits is fully taxable. If the amount of interest exceeds Rs. 10,000, the bank would withhold withholding tax (TDS) at the rate of 10 percent per annum.

However, term deposits with a maturity period of five or 10 years offer tax advantages under section 80 C of the Income Tax Act, 1961.


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