Banks with High Interest Rates on Fixed Deposits

by Nikita Verma on January 14, 2011

in Fixed Deposits

Updated: May 24 2013

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.

Some of you have asked about banks because they are safe, but there are plenty of other safe places to invest your money in India too, and you can opt for one of those instead of a bank. (Read: List of 10 Safe Investments in India)

S.No. Bank Tenure Interest Rate
1 Tamil Nadu Mercantile Bank 20 month 20 days 9.50%
2 Lakshmi Vilas Bank 1 year 9.50%
3 Karur Vysya Bank 2 years to 3 years 9.50%
4 City Union Bank 2 – 5 years 9.25%
5 Yes Bank 15 months 9.25%
6 Punjab and Sind Bank 500 days 9.25%
7 Central Bank of India 555 days 9.25%
8 Dena Bank 750 days 9.25%
9 Allahabad Bank 1 year to less than 2 years 9.15%
10 South Indian Bank 1 – 3 years 9.00%
11 Bank of India 1 year to 8 years 9.00%
12 Oriental Bank of Commerce 1 years to 10 years 9.00%
13 Canara Bank 1 year to 2 years 9.00%
14 State Bank of Patiala  555 days 9.00%
15 Indian Bank 9 months to less than 3 years 9.00%
16 Kotak Bank 700 days 9.00%
17 Andhra Bank  1 year to 10 years 9.00%
18 Corporation Bank 1 year to 5 years 9.00%
19 IDBI Bank 500 days to 5 years 9.00%
20 Indian Overseas Bank 1  – 5 years 9.00%
21 ICICI Bank 390 days to 2 years 9.00%
22 Syndicate Bank 1 year 9.00%
23 Axis Bank 15 months to less than 5 years 8.75%
24 Dhanalaxmi Bank 200 days 8.75%
25 State Bank of Travancore 1 year to 1000 days 8.75%
26 Bank of Baroda 1 year 8.60%
27 J&K Bank 1 year – 10 years 8.50%
28 Vijaya Bank 1 year to less than 3 years %
29 Karnataka Bank 1 year to 3 years %
30 Federal Bank 1 – 3 years %

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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{ 370 comments… read them below or add one }

GeekDude March 20, 2012 at 6:14 pm

Hi Manshu, Nice post on interest rates. By reading entire post i came to know that only “Dhanlakshmi Bank” and “Syndicate bank” are offering high interest rate in less Tenure. These are the best banks to deposit our money.

Reply

Jerry March 30, 2012 at 4:30 am

Hi geek dude,
First of all, this blog is THE BEST answering lots of my financial question that was not addressed in any other finance websites.

And just want to point out that there is a risk in investing money in FD with less tenure. This is called as “Risk of Re-investment”. Remember, all these interest rates are calculated on ‘per annum’ basis (i.e., for 12 months). So once, your investment that matures in lower tenures (say 300 days in dhanalaxmi bank), and if you want to re-invest the principal and interest income into some other FD ot the same FD – yoo need to know that interest rate at that time will not be as competetive as now. Meaning, after 300 days of your FD, you may end up re-investing your money back to a lower FD scheme (with may be 7-8% p.a)

So if you can invest for longer tenure say 3 to 5 years, this is the best time, as you will get competetive interest rate that is going to be reduced. Else, if you want to make some quick bucks, and no plan of re-investing that money, then you can go for schemes like 300 days FDs like mentioned above.

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Manshu April 2, 2012 at 4:06 am

Thanks for your great comment Jerry!

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Jerry April 5, 2012 at 12:03 pm

Hi Manshu,
You are doing awesome job in this blog.
Also, it would be great if I get further more information on the other interest rate schemes.
Meaning, I have come across this following link, where Kerala State Transport Corporation is accepting FD, and paying interest rate of 10.25% for one year. More options are available here:
http://www.ktdfc.com/index.php?option=com_content&view=category&layout=blog&id=11&Itemid=21

This FD is backed by Kerala State Government, so risk will be very minimal.
I am trying to collect these kind of FD schemes, but no so successful as of now.

Would you be able to post a blog on this kind of FD schemes from Government (State or Central) and other entities, it would be very useful for people like me.

Thanks,
Jerry.

Reply

Manshu April 5, 2012 at 6:54 pm

Thanks Jerry, someone had left a comment about this earlier as well, but I’m not really knowledgeable enough about these things to write about it. I can try researching some info on KSRTDC specifically but then I don’t know how comprehensive it will be. I’ll give it a try. Thanks for the suggestion.

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pankaj March 21, 2012 at 5:29 pm

Hi,
If i have some x amount but not sure whether i need them in next 6-8 months, but also don’t want to keep it in low interest rates saving account.
Is it good to keep them in FD (break FD if i need money) or some banks are providing penalty free FD where i can withdraw money anytime. ?

Reply

Umesh March 21, 2012 at 6:59 pm

Hi Pankaj

There are few ways and you can select the most suitable one at that point of time. But please check with the bank before you put your money in FD

1. Some banks have “sweep in sweep out” facility, may be in some other name. I think this is exactly what you want. I remember Manshu made a post on this.
2. Some banks allow to withdraw money anytime after some period without penalty eg SBI for 7-180 days deposit (please check with SBI)
3. Otherwise you can take loan upto 90% (depends on bank) of your FD amount.
4. You always have the option to break your FD prematurely, with penalty.

You can make some calculation to find out the most economical option, if you have to choose between 3 & 4

If you think you may need money before FD period, it will be good idea to divide the amount in 4-5 or more smaller FDs instead of 1-2 FDs, eg get 4 FDs of 10K, 20K, 30K, 40K instead of 1 FD of 100K and encash the FD as per your requirement.

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Manshu March 25, 2012 at 1:05 am

I think Umesh has laid out all reasonable options to you and the only thing I’ll add here is that even if banks don’t impose penalty on your fixed deposit – they will give you that rate of interest which is applicable for the duration you kept the money in.

So, if a bank offers 10% for 1 year and 5% for 6 months, and you make a FD for a year , but break it in 6 months, the bank will give you 5% for 6 months and not 10% for 6 months.

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Anand March 21, 2012 at 10:42 pm

Hi, could you clarify my doubt.
An Housewife would like to invest in 5L in fixed deposit to generate 10% p.a return. She would receive 50,000. Assuming, Bank will deduct TDS @ 10.3% so she would effectively earn 44,850. No additional income for her. Since the tax slab rate is 1,60,0000, would she get her 5150 deducted as TDS when she declares she has only income of interest with income tax or TDS gone is gone?

Reply

Manshu March 24, 2012 at 11:53 pm

Since she is not liable to pay any tax – what you need to do is file form 15G with the bank when you open the FD so that they don’t deduct the TDS. This is a fairly simple process and if you ask them they will guide you through it.

Reply

Sahil March 27, 2012 at 5:38 pm

Sbi increased deposit rates. flash on cnbc. one suggestion. make a fresh post on prevailing income tax saving fd for late latifs . still 4 days for this fd

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chirag March 27, 2012 at 11:45 pm

Hey friends i want tio know fd interest rates of yes bank tell me any one?

Reply

Manshu April 2, 2012 at 4:26 am

Chirag – here is the page with the interest rate of Yes Bank.

http://www.yesbank.in/index.jsp?navigationUrl=%2FYES+Bank+Repository%2Fen%2FBranch+Banking%2FBranch+Banking+-+Personal%2FFixed+Deposits

What is it that you’re trying to do? If you could give more details, perhaps you could get more information.

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Tanya March 28, 2012 at 12:11 pm

Hi,

Please clear my doubt. I have invested in tax saving fixed deposit for this financial year. I have to submit xerox copy of the receipt advice in order to obtain form 16. Since CUSTOMER ID is mentioned in the FD receipt advice, is it safe to submit as it is or should I strike out CUSTOMER ID in the xerox copy??
Awaiting for your reply.

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K Farooq April 2, 2012 at 12:11 pm

Hi,

I want to know the x account can i with draw monthly interest amount. If possible please suggests which bank (and account) is best interests rates for monthly withdrawing interests.

Awaiting for your reply.

Reply

Elda Mary April 9, 2012 at 4:44 pm

Hi
I would like to invest Rs. 50000 in corporation bank as fd for 5 or 10 years.

I would like to know whether tax will be deducted? In such case how much?

Elda

Reply

Naresh V April 15, 2012 at 2:54 am

10% on NRE accounts for 7 years at Deccan Grameena Bank

Reply

Naresh V April 15, 2012 at 2:55 am

Deccan Grameena bank is a govt bank. It is sponsored by State bank of Hyderabad.

Reply

mushtaq April 15, 2012 at 10:16 am

well u dint add Ing vysya bank which is offering 9.75 for 366 days & interest paid is monthly quarter yearly & on maturity….

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Naveen April 16, 2012 at 3:16 pm

Hi Manshu,
I have retired recently & received lump sum retirement benefits( Total 35 lakhs).
I have no need for monthly income.
I would like to invest this amount in low risk instruments with liquidity& decent returns.
I see that some banks SBI, Corporation bank are offering FDs with no premature penalty.
Corporation bank http://www.corpbank.com/asp/showNews.asp?news_id=215
seems particularly attractive with 9.75 % rate.

I am little doubtful about the bank though, i have no experience with corporation bank, i know its a nationalized one .
Whats are your thoughts if i invest my whole kitty with their FD?

Can you suggest some other safe investments with liquidity & capital appreciation?

Regards,
Naveen

Reply

Jitendra P.S.Solanki April 30, 2012 at 10:28 pm

Naveen,

FDs are surely an attractive proposition in today’s scenario. If your interest income is non taxable then investing entirely is not a bad idea if it is meeting your desired income requirement.

However, the investment does not cover inflation and to counter it some part of your surplus you should park in high growth instruments. A mix of debt and equity will be a good option.This will cover the risk of inflation.

Reply

Ram Narain April 29, 2012 at 9:39 pm

Interest Rate of FDR on 1yr has been reduced to 10% by Lakshmi Vilas Bank w.e.f. 20.04.12.

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JAY KAPADIA May 10, 2012 at 1:10 pm

Hi Manshu,
Your information is really very helpful. Kindly include Saraswat Bank in your list which is giving 10% interest on 3-4 years fixed deposit.

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Manshu May 10, 2012 at 7:11 pm

Thanks Jay – that’s a co-op bank is it not? I’m not inclined to add co-operative banks to this list at the moment.

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Rao May 15, 2012 at 2:06 pm

Hello,
Much appreciate if you could let me know the following:
1.Which bank in Bangalore gives the highest FD returns.Total investment may be 50L.
2. If we ned to run the family on the interest gained through FD,how do we avoid TDS.

Reply

Kotapati Ravi Kumar October 21, 2012 at 10:38 pm

I think it will be better if you open multiple FD accounts with different bank so that at least TDS will be reduced

Reply

SHYAM June 6, 2012 at 7:25 pm

The interest rate of Dhanlaxmi bank is attractive obtusely but is this bank trustable?

Reply

JAY KAPADIA June 8, 2012 at 4:49 pm

Hi Manshu,
Kindly include Oriental Bank of Commerce in your list which is giving 9.5% interest on 12-23 months fixed deposit.

Reply

Bala June 8, 2012 at 10:30 pm

Hi, If we deposit some amount in FD for a particular period, shall we withdraw the interest amount every month ?

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ankurm June 21, 2012 at 10:07 am

Have 1 question wrt tax applicable to FD. Lets say i open an cumulative 2 year FD in August 2011 for 10,000 at 10%; in June 2012 i prematurely break the FD and applicable rate (net of interest penalty & duration) is 8%; now will I pay tax on interest for the PY 2011-12 as per 10% or 8%. If at 10%, for 2012-13, I will downward adjust my taxable interest?

Reply

saji joseph June 25, 2012 at 11:57 pm

i would like to know about fixed deposit, i mean multyply inhow many years?

Reply

Kala July 28, 2012 at 8:24 am

Hi,

My husband is retiring from service and would like to invest the benefits, so that the returns can help us to pay back the Home Loan EMI. Which would be better whether a short term / long term FD’s in banks or in Post Office deposits? what are the interest rates going on as of now?

Reply

Manshu July 29, 2012 at 1:23 am

Right now some banks offer more than 10% on FDs for senior citizens so that is one option you can look at.

Reply

Kala July 30, 2012 at 7:54 am

I am so sorry my husband is not a senior citizen. He is just 38 and retiring from his defence service after 20 yrs of service. Plz confirm details. Thankyou

Reply

JAY July 30, 2012 at 12:05 pm

Hi Manshu,
Kindly include Oriental Bank of Commerce in your list which is giving 9.25% interest on 12-23 months fixed deposit.

Reply

Manshu July 31, 2012 at 5:50 am

Thank you for the suggestion Jay – I have included OBC at the bottom of the list. Next time I update the list, I’ll sort it to descending order.

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JAY July 31, 2012 at 2:15 pm

Thanks Manshu for considering my suggestion. United Bank of India is also offering 9.25% interest on 1 to 5 years Fixed Deposit. You may include it in your list.

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Rajeev August 1, 2012 at 12:12 am

Dear,
Can you plz let me know the interest rate of sbi for saving account.
I am getting 2% interest in every 6 months.

Reply

Manshu August 1, 2012 at 5:45 am

It is 4% per year.

Reply

Rajeev August 1, 2012 at 5:16 pm

Dear,
Can you plz let me know how much interest is given by HSBC bank for a saving account.

Reply

Rajeev August 1, 2012 at 5:17 pm

Dear,
I want to take a FD for 2 lacs.
Which bank is better for this and how much interest will be given?

Reply

Ravikumar October 30, 2012 at 10:48 pm

Hi,
There is one type of FD in SBH where you amount will be doubled in 7 years 3 months

Thanks
Ravi Kumar .K.

Reply

R Sivam August 13, 2012 at 10:32 am

Dear Sir,
The city union bank gives 10% for 2 years for senior citizens from 1st Aug 1012. Your table does not explicitly mention this
Sivam

Reply

venkatesh August 23, 2012 at 6:45 pm

I have a request – when or wherever a rate of intererst is shown Pl. also mention the date – and/or time of validity. So I will know whether it is valid for today or not. and increase the column width so with less scolling I can see more.
If an option is also kept sorting by banks name or by rate would be more beneficial.
Pl do the needful.

thanks

Reply

Murali Sunkara August 29, 2012 at 1:26 am
Manshu August 29, 2012 at 4:55 am

That’s not a bank, this page is only for bank interest rates.

Reply

Murali August 29, 2012 at 7:22 pm

Hi Manshu,
I don’t know the differance between bank and DHFL, I think it is housing finance, when I am checking for best FD interest rates, one of my friend suggested about DHFL and he said it is safe in investing DHFL also. When I checked in google I got this page. What do you think, FD in DHFL is not safe ? ? Do you have any idea about other best FD rates which will give more than bank FDs like DHFL ?

Reply

anupriya October 19, 2012 at 12:48 am

this article is very helpful… i m planning some fd investments and this helped tremendously… thanks.

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Kotapati Ravi Kumar October 21, 2012 at 10:27 pm

Hi,

Please let me know if any specific FD’s for childrens

Thanks
Ravi

Reply

Ganapathi October 29, 2012 at 11:24 am

Are you excluding cooperative banks though there a scheduled cooperative bank? Bharath Bank offers 10.30% for 333 days

Reply

Manshu October 29, 2012 at 5:05 pm

Yes, this list doesn’t include co-operative banks.

Reply

Ganapathi November 2, 2012 at 4:02 pm

But you can include ‘scheduled cooperative banks’ though not all cooperative banks

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anil November 16, 2012 at 12:33 pm

hi,

in ICICI bank provides a PF account in latest will u pls update that details.

I heared that 8.8% is given. every month u should pay 500(rural), 1500(urban) people due to the period of 180 days(6months). before 6 months u can’t draw the money. after 6 months only possible. after that, how much amount is there in u r a/c on that amount only 8.8% is appilicable and one more thing is bank provided saving a/c in zero balance. in this 180 days u should deposit min 500 – max. unlimit . and if u have interest to continue is also possible.

thanks and i know some details only so pls send the clear details of that pf a/c.

Reply

Kumar November 17, 2012 at 11:31 am

Hi, I am NRI I would like to deposit some funds in India can anyone recommend which banks are now offering the highest fixed deposit rates at present moment for long term deposits minimum 5-7 years. Thank you for your assistance.

Reply

BHARGAVI November 24, 2012 at 12:53 pm

Hey ,
My mom wanted to invest her savings in FD (say about 50k) , she is a house maker , there is no other source of income so she wants to use/withdraw the intrest every month for the expenses.Can anyone assist me which bank is suitable for her to invest her savings and wat should she opt for the long term deposits or the short terms ??

Thanks!

Reply

Manshu November 24, 2012 at 9:56 pm

Please look at the above table, and select 3 or 4 banks that have a high interest rate and are conveniently located from your mom and then you can open a FD in one of those banks.

Reply

RAju December 26, 2012 at 5:41 pm

Hi buddy,

This is a very informational post, thank you. :)

I had a doubt:

Suppose I opened an FD of total amount of 1 crore with Corporation Bank. Now, assume that they are giving 10% interest yearly. Now, after an year, Corporation Bank changes its interest rates to 8% – my doubt is, I will still be getting 10% yearly interest from Corporation Bank because when it was 10% I signed up for the fixed deposit, right?

Let me know buddy, thanks!

Reply

Umesh December 26, 2012 at 8:13 pm

Yes, You are right.
You will get 10% interest for the period of FD, irrespective of change of interest rate during FD period.

Reply

Manshu December 26, 2012 at 8:48 pm

Thanks for the clarification Umesh!

Reply

RAju December 26, 2012 at 9:17 pm

Hello Umesh,

Thank you for answering my question.

I had an other one – all the fixed deposits have maximum of 10 year maturity period. Do we have maturity period of more than 10 years? Like perhaps 20 or more?

Reply

Umesh December 26, 2012 at 9:35 pm

IMO, no.
Banks do not have maturity period of more than 10 years.
But why want a maturity period of longer duration.
Banks are smart enough and they do not pay higher interest on longer duration FDs.

Reply

RAju December 26, 2012 at 9:41 pm

Wow, okay.

I was just thinking about more maturity period because I thought it would be good to have FDs as a good monthly income scheme plan for at least 20 years or so (well, I can forget about 20 years now…).

Are there any bonds or something which offer 8% guaranteed annual return for more than 20 years or so?

Oh god I am so confused with all this finance world, childhood was much easier lol. :D However, I thank you very much for answering my queries buddy. :)

Reply

Umesh December 26, 2012 at 9:54 pm

You want 8% annual return.
Here is one tax free bond and you can get 7.90% on annual basis.
For details you may visit
http://www.investitude.co.in/
http://www.onemint.com/2012/12/21/iifcl-tax-free-bonds/
This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR.

Mr. Shiv Kukreja writes regularly for OneMint and he has written many articles on savings and finance planning in OneMint.

Reply

Rahul H January 8, 2013 at 3:35 am

Hi Nikita,

Thanks for this post. It is really very helpful. I have a query for you, can you please tell me whats the Interest rate given by UCO bank? I want to fix deposit a sum for around 5 years.

Thanks in advance,
Waiting for your reply.

Reply

rahul January 11, 2013 at 11:23 am

vijaya bank now gives 9.75 % for senior citizen
and yes bank gives 10 % for senior citizen for 15 months

so can u please tell me which is better ..??

Reply

kuldeep singh January 17, 2013 at 7:18 pm

Uco bank is offering 9.10% rate of interest for one year deposit.
Thanks& regards
kuldeep singh

Reply

Ramamurthy March 19, 2013 at 2:39 pm

NHB Savriddhi FD – GOOD for investment for following reasons
1.National Housing Bank is owned 100% by RBI
2.Investment up to Rs 1 Lac is exempt from Tax under Sec 80C
3.Rate of Interest 9.25%(9.85% for Senior Citizens)
4. Lock in Period 5 Years
5.Under non cumulative option interest to be paid once in Half Year or Annual
Furthur details at http://www.nhb.org.in

Reply

Mahesh kumar March 30, 2013 at 10:22 am

Sir What is rate interest of Fixed deposit As on 1st April 2013 if Increase any basic % what ? Plz tel me

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Nailesh May 27, 2013 at 2:26 am

Hi,

Yes Bank offers an account with an AQB of 25000 wherein money above 25000 is auto transferred to an interest account and the rate of interest is lined to the FD rate for 12 months- 9 % . Interest is paid out monthly and the money is not blocked nor is there a prepayment penalty. So it is similar to a savings account with an interest rate of 9% for the days money above 25000 remains in the account.

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Ramamurthy May 28, 2013 at 12:25 pm

Thank You Nailesh.Very valuable piece of info.I dont know why the Bank does not give publicity to such news.With more publicity the Bank will collect more Deposits.Or perhaps the does not want much funds under this scheme

Reply

PS July 18, 2013 at 10:29 am

Do banks in India pay interest on Fixed Term Deposit compounded monthly or quaterly

Reply

Manshu July 18, 2013 at 5:37 pm

Interest is compounded quarterly.

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Hot Indian Dealz August 29, 2013 at 12:16 am

Allahabad Bank is better for deposit. I like Dena Bank but i think, it is private bank, right?

Reply

Gopinath September 7, 2013 at 11:03 pm

This article is a bit out dated and there a few changes to the interest rates offered by the banks since the article is posted.

Compilation of latest fixed deposit interest rates offered by various banks is available at – http://www.coziie.com/fixed-deposits/banks-paying-high-interest-rates-india. May this is helpful to those who are looking for high interest rate fixed deposits.

Reply

Viswandh mathi October 26, 2013 at 3:00 pm

Dear sir,
I am dreawing salary 7 lacs /anum. for tax saving purpose I want to save 3000/month – 5yrs fixed deposit in “Karur Vysya Bank”.Is this correct way bcoz i have no knowledge about tax saving.

For tax saving,which option is better i.e LIC,mutval funds,FD,–etc Pls clarify

Reply

Rajeev November 17, 2013 at 9:16 pm

Hi,
I want to open a MIS(monthly interest scheme) for 10 lack for 3 years in State bank of india.
can you pls let me know the monthly interest i”ll get……….!

Reply

Ramamurthy November 17, 2013 at 9:36 pm

I dont think any public sector Bank accepts deposits on which interest is paid monthly.
There is proposal to do so.As far as I understand YES BANK pays monthly interest on fixed Deposits at interest of about 9%.

Reply

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