Investing funds to gain better returns is the need of the hour. Everyone today is looking for better investment opportunities that would yield better returns in a span of 1-5 years. However, there are many who also look for long term investments that would help them secure their child’s education, daughter’s marriage or even for personal retirement goals.

Among all the investment options available out there, Fixed Deposit schemes are considered highly reliable and trustworthy for decades as they promise assured returns at the end of the tenure. Being said that, one shouldn’t just blindly opt for a Fixed Deposit scheme at any bank. There are 100s of different banks out there in India and each bank offers a different rate of interest for their Fixed Deposit plans based on the tenure and sum invested.

Hence, it is highly important to research on all the banks and choose the best bank that offers the highest Fixed Deposit interest rates.

But, before we get on to the list of different banks with their FD interest rates, let’s know more about Fixed Deposit schemes.

Fixed Deposit Highlights:

  • Tenure or Maturity offered by Banks in India for Fixed Deposits is between 7 Days to 10 Years.
  • Banks such as IDBI Bank, State Bank of Patiala and The Ratnakar Bank offers Fixed Deposit schemes up to 20 years as well.
  • Most Banks in India compound interest quarterly.
  • Interest earned up to Rs. 10,000 per year in saving account is a 100% Tax free. Interest rates on short Term Deposits are similar to that of a savings account, so there’s nothing to worry about FD interest rates.
  • If the interest income goes beyond Rs. 10,000 in a financial year per bank, then the bank will deduct the TDS (Tax Deducted at source) at the rate of 10%.
  • Banks do offer Loan/Overdraft against the Fixed Deposit.
  • Any premature withdrawal of Fixed Deposits may result in penalty incurred by the depositor.

Fixed Deposit Interest Rates 2016:

Currently, The Ratnakar Bank offers the highest interest rate on Fixed Deposit for a period of 2 to 3 years at the rate of 9.0%.

However, Banks offer different interest rates on fixed deposits depending on the period of investment. Hence, one must check the interest rates for each bank based on the following time slots:

  • FD for Less than 1 Year
  • FD for 1 to 2 years
  • FD for 2 to 5 Years
  • FD for More than 5 years

Following are the tables for each time duration with the list of banks offering highest interest rates on Fixed Deposits. We have also included the No. 1 Bank in both Private and Government sector (ICICI Bank and State Bank of India respectively) to make it easier to choose the right bank for Fixed Deposit investments.

Best Fixed Deposit Interest Rates (Less Than 1 Year):

Winner The Ratnakar Bank (Offers an interest rate of 8.25% for a Fixed Deposit term period of 241 days to 364 days.

Name of the BankFixed Deposit TermInterest RateSource
The Ratnakar Bank241 days to 364 days8.25%Know More
DCB Bank6 months to less than 12 months8.00%Know More
State Bank of IndiaGovernment Bank Benchmark5.25% – 7.00%Know More
ICICI BankPrivate Bank Benchmark4.00% – 7.50%Know More

Best Fixed Deposit Interest Rates (1 – 2 Years):

Winner The Ratnakar Bank (Offers an interest rate of 8.50% for a Fixed Deposit term period of 12 months to less than 24 months.

Name of the BankFixed Deposit TermInterest RateSource
The Ratnakar Bank12 months to less than 24 months8.50%Know More
DCB Bank18 months to less than 24 months8.25%Know More
DCB Bank13 months to less than 18 months8.20%Know More
DCB Bank12 months to less than 13 months8.15%Know More
State Bank of HyderabadSBH Kuber-400 days8.15%Know More
Catholic Syrian Bank400 Days8.10%Know More
Lakshmi Vilas Bank1 year and above & less than 3 years8.10%Know More
Tamilnad Mercantile Bank Ltd555 days8.05%Know More
City Union Bank1 Year8.00%Know More
Indus Ind Bank1 year to below 1 years 2 months8.00%Know More
J&K Bank1 year to less than 5 years8.00%Know More
Karur Vysya Bank1 year and above8.00%Know More
State Bank of Bikaner and Jaipur1 year and upto less than 3 years8.00%Know More
State Bank of Hyderabad1 yr and upto 10 yrs8.00%Know More
Tamilnad Mercantile Bank Ltd1 year to < 5 years7.95%Know More
State Bank of IndiaGovernment Bank Benchmark7.25% – 7.50%Know More
ICICI BankPrivate Bank Benchmark7.75% – 7.90%Know More
Post Office FD (1 Year)Post Office8.40%Know More

Best Fixed Deposit Interest Rates (2 – 5 Years):

Winner The Ratnakar Bank (Offers an interest rate of 9.0% for a Fixed Deposit term period of 24 months to less than 36 months.

Name of the BankFixed Deposit TermInterest RateSource
The Ratnakar Bank24 months to less than 36 months9.00%Know More
DCB Bank24 months to 60 months8.30%Know More
Lakshmi Vilas Bank3 year and above & less than 5 years8.25%Know More
Lakshmi Vilas Bank1 year and above & less than 3 years8.10%Know More
J&K Bank1 year to less than 5 years8.00%Know More
Karur Vysya Bank1 year and above8.00%Know More
State Bank of Bikaner and Jaipur1 year and upto less than 3 years8.00%Know More
State Bank of Hyderabad1 yr and upto 10 yrs8.00%Know More
Tamilnad Mercantile Bank Ltd1 year to < 5 years7.95%Know More
Yes Bank24 Months 12 Days to 24 Months 24 Days7.95%Know More
State Bank of IndiaGovernment Bank Benchmark7.00% – 7.50%Know More
ICICI BankPrivate Bank Benchmark7.75%Know More
Post Office FD (2/3 years)Post Office8.40%Know More
Post Office FD (5 years)Post Office8.50%Know More

Best Fixed Deposit Interest Rates (More than 5 Years):

Winner The Ratnakar Bank (Offers an interest rate of 8.75% for a Fixed Deposit term period of 36 months to less than 120 months.

Name of the BankFixed Deposit TermInterest RateSource
The Ratnakar Bank36 months to less than 120 months8.75%Know More
The Ratnakar Bank120 months to 240 months8.50%Know More
DCB BankMore than 60 months to 120 months8.25%Know More
Lakshmi Vilas Bank5 years and above8.20%Know More
Tamilnad Mercantile Bank Ltd5 Years to 10 Years8.05%Know More
Karur Vysya Bank1 year and above8.00%Know More
State Bank of Hyderabad1 yr and upto 10 yrs8.00%Know More
State Bank of IndiaGovernment Bank Benchmark7.00%Know More
ICICI BankPrivate Bank Benchmark7.50%Know More

Source: Respective Bank’s Official Web Portals

Last Updated: December 31, 2015

Disclaimer: The Fixed Deposit often fluctuate with each bank with respect to their own guidelines or the standards set by Reserve Bank of India. Hence, it is highly recommended to verify the interest rates with each bank before making investments in their Fixed Deposit schemes.