For decades, bank fixed deposits have been seen as a secure investment when compared to other investing avenues. Fixed deposits are thought to be more steady, predictable, and safe, which is why many individuals opt for them.However, fixed deposit (FD) interest rates vary from bank to bank and are determined by a variety of factors including the tenure of the deposit, deposit amount, economic variables such as repo rate, inflation, and other economic considerations.
Also read: After SBI, this bank has started higher interest FD schemes for super senior citizens
Bank customers should compare the interest rates offered by different banks for the desired tenure. Here is a table comparing interest rates offered by different banks for a 3-year tenure across private sector banks, public sector banks, and foreign banks.
Banks offering the highest rate on 3 year fixed deposits
| Bank Name | |
| 3-year tenure (%) | |
| PRIVATE SECTOR BANKS | |
| Axis Bank | 7.1 |
| Bandhan Bank | 7.25 |
| CSB Bank | 5.75 |
| DCB Bank | 7.55 |
| Federal Bank | 7.1 |
| HDFC Bank | 7 |
| ICICI Bank | 7 |
| IndusInd Bank | 7.25 |
| Karur Vysya Bank | 7 |
| Kotak Mahindra Bank | 7 |
| RBL Bank | 7.5 |
| SBM Bank India | 7.3 |
| YES Bank | 7.25 |
| PUBLIC SECTOR BANKS | |
| Bank of Baroda | 7.15 |
| Bank of India | 6.5 |
| Bank of Maharashtra | 6.5 |
| Canara Bank | 7.4 |
| Indian Overseas Bank | 6.5 |
| Punjab National Bank | 7 |
| State Bank of India | 6.75 |
| Union Bank of India | 6.7 |
| FOREIGN BANKS | |
| Deutsche Bank | 8 |
| HSBC Bank | 7 |
| Standard Chartered Bank | 7.1 |
Source: Paisabazaar data as on January 8, 2025
When is TDS applicable on fixed deposits?
If the interest on the FDs exceeds Rs 40,000 (Rs. 50,000 for senior citizens) in a fiscal year, TDS (tax-deducted-at-source) would be deducted. For resident clients, the annual interest deduction will be 10% if your PAN card information has been submitted. The bank will deduct 20% annually if you don’t have a PAN card.Also read: Bank of Baroda Liquid Fixed Deposits: How you can get higher returns with easy partial withdrawal facility
How easy is it to take out your money from a fixed deposit?
A fixed deposit allows you to easily liquidate your money in an emergency, unlike other investing alternatives that frequently include withdrawal limitations or lock-in periods. When you need fast access to money for emergencies or unanticipated costs, this feature of fixed deposits comes in handy.
How safe are fixed deposits?
A fixed deposit (FD) allows a person to invest an amount of money at a set interest rate for a predetermined amount of time, ranging from seven days to ten years. According to the DCB Bank website, “Fixed Deposits are considered safe with assured returns. Your deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). It is a wholly-owned subsidiary of the Reserve Bank of India (RBI), created by an Act of Parliament. It provides coverage of up to ? 5 Lakh per depositor. This means that in the event of liquidation of a bank, your deposits with the bank are insured for up to Rs 5 Lakh for both principal and interest amount, under the deposit insurance scheme of DICGC”
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