Updated: December May 05 2012
After I did the post on Indus Ind Bank offering 9.5% for 400 days, I received emails from readers Suresh Jain, and Vijay Dongre to tell me about a couple of other banks that are also offering good rates, so I thought I should do a small post to inform other readers about these banks that are offering high interest rates on fixed deposits.
I’ve also added to the information emailed to me by compiling a list of bank fixed deposits that are offering more than 9% right now.
Although I’m sure I would’ve missed some banks, I think this list constitutes some of the best fixed deposit rates that are currently being offered by Indian banks. If you know of any banks outside this list then please leave a comment, and I’ll update the post with your suggestions.
| S.No. |
Bank |
Tenure |
Interest Rate |
|---|---|---|---|
| 1 | Dhanalaxmi Bank |
3 – 5 years |
10.10% |
| 2 | Lakshmi Vilas Bank |
1 year to less than 2 years |
10.00% |
| 3 | City Union Bank |
1 year |
10.00% |
| 4 | South Indian Bank |
39 months |
10.00% |
| 5 | Karur Vysya Bank |
1 year to 2 years |
10.00% |
| 6 | Karnataka Bank |
1 year to 2 years |
9.75% |
| 7 | Tamil Nadu Mercantile Bank |
1 year to less than 2 years |
9.75% |
| 8 | State Bank of Patiala |
999 days |
9.75% |
| 9 | Yes Bank |
15 months |
9.60% |
| 10 | Dena Bank |
1 year |
9.60% |
| 11 | Syndicate Bank |
1 year |
9.05% |
| 12 | Punjab and Sind Bank |
500 days |
9.50% |
| 13 | J&K Bank |
2 years to less than 5 years |
9.50% |
| 14 | Vijaya Bank |
1 year to less than 2 years |
9.50% |
| 15 | Indian Bank |
1 year to less than 3 years |
9.50% |
| 16 | Allahabad Bank |
1 year to less than 2 years |
9.50% |
| 17 | Kotak Bank |
390 Days |
9.40% |
| 18 | Andhra Bank |
1 year to 3 years |
9.40% |
| 19 | Central Bank of India |
2 yr to less than 3 years |
9.30% |
| 20 | Bank of India |
1111 days |
9.30% |
| 21 | Corporation Bank |
12 months |
9.25% |
| 22 | IDBI Bank |
500 days |
9.25% |
| 23 | Federal Bank |
1 year |
9.25% |
| 24 | Axis Bank |
1 year to less than 3 years |
9.25% |
| 25 | Indian Overseas Bank |
1 – 3 years |
9.25% |
| 26 | ICICI Bank |
390 days to 5 years |
9.25% |
| 27 | State Bank of Travancore |
1 year to 3 years |
9.00% |
| 28 | Canara Bank |
1 year |
9.00% |
| 29 | Bank of Baroda |
444 days |
8.85% |
As you can see these are some great rates, and the good news is that the tax saving fixed deposits have also got some great rates these days. If you haven’t done your tax saving investments yet then you can take advantage of those rates.
Fixed deposits aren’t the only thing that help you save tax – there are plenty of other instruments that help save tax and you can visit this page to understand the nuances of Section 80C tax saving investments in an easy to understand graphic.
Update: There was an error in the post where I said HDFC is offering 9.50%, but a couple of readers emailed me to let me know that the higher rate was for senior citizens only. I have corrected that, and apologize for the error. Thank you to Anil Kumar Kapila, and Rakesh Jain for their emails. Also, the list of senior citizen’s bank interest deposits didn’t include quite a few names in the above table which I have done now. Update 2: Added ICICI Bank’s 990 days interest rate for senior citizens. Update 3: Added Indian Bank on the comment of P.T Palani Update 4: Removed the list of senior citizens interest rates from this post because I’m finding it hard to keep the list current.
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so if i deposit 1,00,000 for 1 year and the interest rate is 10%, will i get 1,10,000 after 1 year?
or will it be more?
what is mean by Interest Compounding Period? how the above listed banks are calculating it on fixed deposits? is there any accumulation with in 1 year time? can anybody explain it in detail please…
There may be tax, and the interest is usually compounded semi annually so the interest itself will be a bit higher.
LakshmiVilas Bank 10.5 percent 1-2yrs also city union bank 10.4 percent
I got this info from http://www.ratekhoj.com/ Need to verify I believe.
http://www.ratekhoj.com/search-fd.php?service=%2Fsearch-fd.php&citizentype=non-senior&duration=all+periods&insti=1&amt=deposit+amounts+less+than+Rs.+15+lakhs&tsscitizentype=non-senior&nroduration=all+periods&nroinsti=all&nroamt=all+deposit+amounts&searchstring=+++search+using+city%2C+state%2C+locality%2C+pincode%2C+ifsc%2C+micr+etc.&sorttype=rate&sortorder=DESC&filewrite=0
hi manshu
i have a doubt. why banks are giving more interest for a lesser period and less interest for a greater period. for example SIB (south indian bank) gives 10% for 300 days and 9.25% for 1-2 years. so in SIB people can deposit the money on 10% for 300days and when it is matured they can redeposit for another 300 days and get more interest. then what is the benefit of depositing the money for 2 years for only 9.25% interest?
They expect the rates to go down in a couple of years Roshan – so they don’t want you to lock on to a high rate for a long period. Because if interest rates fall and you are locked on to such a high rate for a number of years – they won’t be able to charge a high enough rate to cover the old fixed deposits.
This is the trend of late that is to give less on a longer period of deposit.It appears to be result of frequent fluctuations in the lending rates as governed by the RBI and the cascading effect thereof. This is a reverse situation from older times and it is true for most banks.
I want to invest in Lakshmi vilash bank , But unfortunatly there are no branch of this bank in my home town i.e. in Biharsharif, Nalanda (Bihar). How it will possible to invest in this bank.
Repco bank which is a Govt.of India undertaking is offering 11% for 22 Months for Senior Citizens & the deposit is known as REPCO 22 .
Thank you for your comment – I have updated the senior citizen post with that input.
If i put 100000 rs in sbi for 1 year in fix.howmany rs i get after 1 year?
so if i deposit 1,00,000 for 1 year and the interest rate is 10%, will i get 1,10,000 after 1 year?
or will it be more?
what is mean by Interest Compounding Period? how the above listed banks are calculating it on fixed deposits? is there any accumulation with in 1 year time? can anybody explain it in detail please…
No, they will deduct TDS on it at 10% and then pay that to you.
Iam getting 5 lakhs personal loan from some bank and the EMI will be 12500/-If I take the loan and deposite it in the form of fix deposite to any bank for the same tenure of refund, will I be in profit to some extent…………?
Quite unlikely, but you didn’t say the term of the loan – how long is it – 5 years?
Hi,
this is my first posting , my question is it good option for going for FD in this present situation or go for MF’s? or any other for Tax savings as well for money growth.If for TDR how Lakshmi vilas bank is rated? it is new to me ….or shall i go for state bank group or BOB? Please tell me how LVB is secure?
FD and shares or equity mutual fund are two different things – you can’t compare one with the other because in mutual funds there is a risk that you might lose all your capital as well. Now, for LVB – I don’t know particularly about that bank but in general you have an insurance from RBI for Rs. 1 lakh FD amount, and it’s always good to spread out your investments and not have all your eggs in one basket.
If I were in your position I would open two or more FDs.
I am a senior citizen and want to deposit in fd.kindly intimate maximum rate of interest payable.
I am a senior citizen and desirous to keep my 5l of amount in f/d. kindly intimate at earliest.
You need to contact a bank at the earliest, writing a comment here will not get you closer to opening an account as this is like a news website.
Sir, at the moment REPCO Bank a Govt. run bank pays the maximum. Their interest rates for Senior citizen is 11% for 22 month period.
If i deposit 1,00,000 for 1 year and the interest rate is 10%, will i get 1,10,000 after 1 year?
or will it be more?
so if i deposit 1,00,000 for 1 year and the interest rate is 10%, will i get 1,10,000 after 1 year?
or will it be more?
i want to know the best way of getting some income by investing some amount.
Axis bank has launched Guaranted Monthly Income Plan?
How it is?
I have never looked at it – let me see what that’s all about and I’ll write about it. Thanks for the idea Bhavin and thanks for leaving a comment.
Axis bank has launched Guaranted Monthly Income Plan?
How it is ?
Presently Oriental bank of Commerce is also offering 9.75% for a deposit for 1 year to less than 2 year
I want to invest for double money scheme & have benefit of Tax also which bank or other scheme is preferable
SBI is offering 9.25 % Fixed deposit for 1yr
Thanks Sreenivas – I’ll update this post shortly.
IDBI Bank offers the highest interest for TAX Saving Deposits @9.5% p.a.. TAX Saving Deposits are generally locked in for 5 years. It also gives a free Cheque book account and a free ATM cum Debit Card.
I am sure this would be usefull to people looking to invest in TAX Saving Deposits.
Hardik
state bank of travancore is not giving 10% interest rate on fixed deposit of 500 days. It had been decremented to 9.5% w.e.f 01\12\2011.
you have published list of fixed deposit rate of bank
but actually, dena bank 1 yr rate 9.60
syndicate bank 364 days fd rate differe
Thanks for pointing that out Pradip – I will take a look at all these rates again – must be time to update this post.
i want to open a fd. but i am confused it is better then any long time investment in any bank. and how many year money will be double by deposit.
One newbie question…if tomorrow RBI cuts rate and FD rates fall..will the old FDs done @ higher rates get effected or not ?
Old FDs will continue to get the rates they promised you.
Thanks Manshu,
How about Tax angle for senior citizen, I believe 15H can avoid TDS but what about cases like..huge sum for longer time.. that too will tax free ?
For example 10 L for 10 year in SBI for 9.75 will yield ~26 L …is the entire amount tax free ?
You need to take the interest earned every year and show that as part of income even if you are reinvesting it. If that crosses the exemption limit then yeah you need to pay tax on it – if not then you don’t.
i want to invest few lacks , so that i get good return amount by doing that .
can you help me out for the best option?
Dear Manshu,
Bank is saying that Form-15G should be signed only by the first holder. According to the bank, Second holder cannot sign this form even in case of deposits with ‘either or survivor’ as operating instructions. Is this correct ?
If yes, is there any way to avoid TDS for a fixed deposit for which the first holder has expired ?
If there is no way to avoid TDS, how to get refund of the TDS for a deceased person ?
Thanks
I don’t know the answer to any of these questions I’m afraid.
Dear Manshu,
Can you please tell me from where can I get answer to these questions ? I would prefer to get the answers on the internet if possible.
Thanks
Since these are tax related questions, I think a forum like the CA Club forum might help because they deal with tax all the time.
http://www.caclubindia.com/forum/default.asp
The first holder is the beneficiary & liable to tax, irrespective whether the deposit is held in single/joint name with the clause as E or S.
In case form 15G is required to be submitted, details of the first depositor is to be mentioned & signed by him/her.
In case the first depositor has deceased, necessary changes is required to be made to the original deposit receipt by deleting the name of the first holder, & then the deposit becomes held by a single individual. Then that sole holder becomes liable to tax, & can submit the requisite 15G, if required.
How about the case of nomination…in case of deceased ..will the nominee get the entire amount tax free or he has to give tax on that ?
In case of deceased, the nominee gets the entire amount, & TDS would be deducted in case the interest amount exceeds Rs.10000/- & form 15G is not submitted.
He has to pay tax according to the slab in which he is liable to tax while filing his return of income, as it will be considered as part of his/her income liable to tax.
Thanks,
Opening FD in name of parents > 60 seems to be good option with form 15H , look like RBI is going to cut rate cut soon…
i come to know that REPCO bank, a govt. of india enterprise, is offering 10.6% for general and 11% for senior citizen for a period of 22 months. Same may be confirmed from http://www.repcobank.com/
Hi,
I want to ask if i want to deposit some lakhs in FD , can i do it in parts, like 1 lakh in 1 month, another 1 lakh after 2-3 months. And Secondly if i withdraw amount in parts from FD before maturuty did i need to pay some penalty or still i can enjoy the same rate that was comitted initially by banks??
Is there any bank providing this flexible RD ?
–Pankaj
Hi Pankaj,
You can always do multiple FDs in the way you are mentioning. You will get the rates present at that time, but that’s the only way. If you break the FD before maturity then the bank will pay you interest for the time you kept the FD with them.
So, if the FD was for 3 years at 9.5% but you broke it in 6 months and the six month interest rate is 6% they will give you 6% for six months. Some banks also charge a penalty by reducing the interest rate by a percentage or two and that will also reduce your interest rate.
If banks didn’t do this then everyone would just make the FD at the tenure which gives the highest interest rate and then break it when they want.
Hi Manshu,
Thanks for the information. One more thing i want to ask that nowadays some banks is giving option of opening a Saving Max account with minimum amount of 25K and when the amount => 1,250000 the amount 1L is turned to FD with 9.25% and giving facility to deposit and withdraw amount without any additional cost in FD. Is it good to invest in that plan or rather go for simple FD.
Thanks
Pankaj
Hi Pankaj,
You mean the auto sweep account, right?
I did a post on that some time ago and a few people commented on some hassles and restrictions on this so you may be surprised by some bank terms when you actually go to use the facility.
And on top of that there is really no benefit of doing such a thing. If you know that you won’t need the money in future, then just do a FD and take full advantage of their best rates. For most banks the best rate are on odd days of 390 days or 690 days or something like that and the auto FD will not get you that rate.
Please forgive my ignorance of the Indian banking system, but those interest rates seem incredibly high considering that it is difficult to find a US or European bank paying more than 1% annual interest on fixed deposits. Yet you seem to be reporting quite a few Indian banks paying as much as 10% per annum. Why don’t american and european citizens make deposits to these Indian banks and earn 10X more than they are currently earning from their current banks? Are there laws in India to prevent that? Do Indian banks have “deposit insurance” that protects all depositors, citizens or otherwise, from loss up to a certain limit? Where can I learn more? TIA.
Hi Jeff – yes, you guessed correctly, there are rules to prevent foreigners from depositing money in Indian banks. Deposits up to 100,000 are insured and the government guarantees them, but in general – it is very rare to find any Indian banks failing. Not that it never happens, but in general they are rare.
Hi Manshu,
It’s too bad for us then, but congratulations to you guys! We would love to earn a decent return on our savings over here. It seems that saving for our future is no longer rewarded.
One other factor regarding foreign investment that occurred to me after my post: currency exchange rate risk. I believe that the value of the rupee has dropped almost 20% against the US dollar in the past 6 months. So someone who converts dollars to rupees to purchase an FD would have to hope that, when it is time to redeem their investment and convert back to dollars, the exchange rate will have remained the same or better.
Hi Jeff,
I should have probably mentioned this in my earlier comment – the inflation in India is very very high compared with western countries, and even though the nominal interest rates are 9% or above, the inflation rate has also been lingering at about the same level from a couple of years so even though the 9% or 10% sounds high, the real rate of interest is much lower.
And you’re right about the exchange rate, if someone converts $ to INR, then they’re hoping INR doesn’t depreciate more than the interest rate in the future because that will defeat the whole purpose.
Please also mention a column of interest rates of senior citizens ………………………Rakesh Mishra
I’ll create a new article for that – thanks for the comment.
i come to know that REPCO bank is offering 10.6% for general and 11% for a period of 22 months.
allahabad bank , FD interest rate is 9.50% bet 1 – <2 yrs
Thanks Ritesh – added that in the list.
I understand Reserve Bank of India has relaxed rules for NRI of NRE deposits in Indian Rupees if the amount exceeds 1 Cores one can enjoy interested rate as high as 9% and above. How do I check which bank is offering a higher rate of interest on Fixed deposits is there website that has this latest information. What other secure investments can I look for which will give me a higher rate of interest. Thanks you for your assistance.
You can find that list here:
http://www.onemint.com/2012/01/06/best-bank-nre-interest-rates/
i have 5000 rupees fixed deposit to save the bank how to doposit
Go to the bank where you have a savings account, and they will help you set it up. It’s very simple but you will have to go there to get it done.
Can you also list companies that offer fixed deposits. Also suggest whether is it safe to invest in these companies. Some I found are: Jaypee Group that gives 11.75% / 12.25% / 12.5% for 1 /2 /3 years respectively on a minimum deposit of 20000. Sriram Transport Finance Company Ltd. that gives 9.25% / 9.75% / 10.75% for 1 / 2 / 3-5 years respectively on a minimum deposit of 25000. United Spirits that gives 11% / 11.5% for 1 /2 years respectively on a minimum deposit of 25000.
I”ll try to collate that info – I’ll have to see were I can find that info such that it can be updated regularly. Let’s see.
Manshu..thats a nice post.
Can u throw some light on the Monthly income plans that are in the market eg Metlife, Axis etc.
On a query regrding this with Axis, i gt the following reply for a 15K monthly premium “The policy premium payment period is for 6 years. and the guaranteed monthly income will start from the 7th year to next 10 years. You will get Rs.15000/- for the first 5years(ie 7th years to 12th year) and Rs.21150/-will be added to your monthly income for the remaining 5years. This is to considering the rate of inflation. On completion of the monthly guaranteed income, you will get refund of your first year and 50 % of the second year premium.Your annual premium will be Rs.322,426/”
I dont understand the math behind this, is it a good scheme to invest.? Can u pls advice?
Jokula,
Monthly income plans by life insurance are costly affairs.They are primarily endowment plans where the investment of your premium is inclined towards debt. As such the returns are not very high.Also considering the high commission and other expenses the contribution you have to make to fetch a good monthly income is very high and most of the time beyond your means.
I will recommend you to avoid such schemes and invest through other cost effective instruments.
Dear Sir,
I Have 3.5 Million US$
can u please tell me this amount are Converted into Indian Rupee and deposited into Andhra Bank.
it is Possible are Not.
Please Tell Me its Urgent Please.
Sir,
I am aware Repco bank is offering 11% interest for senior citizens and no form 15 G/H need be submitted and ofcourse there will not be any TDS. But I am told that it is a GOI enterprises. I want to make sure how safe it is to deposit in Repco bank.
I enquired about FD with LVB, They are saying that its locked for 5 YEARS and the rate of interest is 9% only.
i want to know the best way of getting some monthly income by investing some amount.
how much amount of money i should invest so i could get 10000.00Rs every month??
Rena,
It solely depends on how much return you are able to make on your investment and the time horizon of your invest. Today a long term FD is fetching you 9-10% interest.So if you invest Rs 12 lakh you can expect Rs 10000 every month. But here taxability will play a major role as interest income above Rs 10000 from all sources in a financial year is taxable as per your income tax slab.Hence, the more viable option is to invest through multiple instruments with some giving you fixed returns and some variable with good growth.
“……… as interest income above Rs 10000 from all sources in a financial year is taxable as per your income tax slab”
Sorry Sir.
Who says that interest income upto Rs 10,000 in a FY is tax free!!!!!!!!
Umesh,
As per IT act interest income from all sources up to Rs 10000 in a financial year is exempted from tax.
You can visit http://www.incometaxindia.gov.in for more info on this.
@ Jitendra
I shall be thankful if you please post the complete website address or the relevant section/sub section of the IT Act, that mention this information. (as I did not get any such information in the website, to the extent I can search)
The return you get for your FD depends on many factors like period for which you require such amount, FD tenure, choice of bank, interest rate of the bank in which you make a deposit, interest payout period, whether senior citizen or not etc. etc
Roughly, you have to make FD(s) for approx 13,00,000 so as to get 10,000 per month for an individual who is not a senior citizen (the amount is pre tax and subject to TDS). FD tenure over 1-2 years, interest rate @ 9.25 of a nationalised bank. Normally interest is paid quarterly but many banks accept for monthly payout for FD of such amount. So it is better if you contact nearby banks.
Thanks,
why the list does not showing co-operative banks intrest rates
Some banks have higher rate of interest for short term deposits and low rate for longer periods. How is that For eg SBI offers less interest for 5 years and more.
Also Repco bank is offering 10+ percentage of interest. There is no necesity of filing 15G and 15H forms. Only problem is there is no ATMs.
9.5% for 5 years is better than 10% for 1 year.
Hi
I am an NRI who wants to put money in India now that the fixed deposits rates offered to NRI is much higher will I be entitle to a higher rate of interest as a a senior citizens gets in India as I understand Senior citizens in India are entitle to a higher rate of interest. Can anyone provide me with some information on this issue.
No, U would not be entitled to a higher rate of interest as a a senior citizens gets in India in case of any NRI deposits, & the same is available only to resident Senior citizens in India. NRIs only get the basic rate & not any extra, even though he might be a Senior citizen resident outside India.
Hi,
I have some 4 lacs piled up in my salary account of ICICI for which am getting 4% interest.
Should I switch to Yes bank for 7% interest or ICICI can revise its rates too. ??
Since ICICI hasn’t raised the rates yet and hasn’t made any noises about raising then in the future it doesn’t seem likely they will raise savings rate in the future as well. You could either make a fixed deposit or move the money, that’s up to you with what you’re comfortable with.
These interest rates are not fixed anymore, so tomorrow some other bank may look better. A good option for you is to move the money to an bank account with sweep-in facility, such an account automatically transfers amounts that exceed a certain level into a fixed deposit. If at any point you make a debit on your account, your latest flexi deposit will be broken to the extent of extra amount required.
Will it be a problem i believe if we invest our funds in Repco bank coz we declare our IT returns to save tax & wen we invest here it wld surely be a problem, coz most of the private banks dont publish all the infor @ FD….
Solanki Sir/Umesh Sir
With reference to your posts dtd. 5.3.12 above, I am eagerly awaiting for the necessary details, as it will help me in saving some rs 2700, that otherwise I have to pay as income tax on bank interest for the current year.
Please clear the position as even my office IT persons are unaware of any such exemption.
Thanks
Saumya
I am sorry Saumya, you can’t save tax on your interest income, and your office IT persons are right, as even a single rupee earned as bank interest is taxable and it will be included in your total income.
I, myself put a question to Jitendra Solanki (in a post above) when he said “As per IT act interest income from all sources up to Rs 10000 in a financial year is exempted from tax.” but he has no reply, perhaps he has no relevant section/sub section of the IT Act on his support.
However FYI, FM proposes that saving bank interest income upto 10K will be tax free from next year.
Now a question arises, if 10K will be tax free from next year then how it was exempted from tax in previous years, as claimed by JS.
Nimisha it will depend on compound interest period.if it is semi-yearly then first interest for 6months will be 5000,then it will be added to the main principal and the total of 1,05,000 will be the principal for the rest semi-year.hence the total amount at the end of one year will be 1,05,000+5,250.5,250 is the interest for the second semi-year.
Hi, I would like to do a FD, request you to suggest me the best bank where I can do my FD
also kindly let me know the tenure I am from bangalore. Thankyou…
The table above has got a list of some of the best rates and the tenures as well, so you can select one that suits you from the list.
Sir, i have invested 1,05,000 and drawn interest around 9975 as FD interest, i am male tax payer in 10% bracket, whether this amount is exempted from income tax.
No. It is taxable.
No TDS deducted doesn’t mean, interest income is tax exempt.
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