fd interest rate: Banks offering highest interest rates on 1, 2 year FDs

A fixed deposit (FD) allows you to put money aside for a set period of time (tenure) and earn a predetermined rate of interest. A fixed deposit typically earns more interest than a conventional savings account until the term expires.

Remember that the interest rate on a fixed deposit is not the same for all tenures. Choosing the longest term offered does not guarantee you the best interest rate. Check the interest rate table, which is normally available on the bank’s website, and choose the tenure that gives you the highest compound interest rate.

FD interest rates with 1 year tenor

Bank Name1 YearQly Compound Return
RBL Bank6.2510639.80
Indusind Bank6.0010613.64
Bandhan Bank5.7510587.52
IDFC First Bank5.7510587.52
DCB Bank5.5510566.66

FD interest rate with 2 year tenor

Bank Name2 YearQly Compound Return
Indusind Bank6.5011376.39
RBL Bank6.5011376.39
Bandhan Bank6.2511320.54
DCB Bank6.2511320.54
IDFC First Bank5.7511209.55

Is your FD safe with bank?
Your deposits are covered up to Rs 5 lakh in insurance. Most of the banks are governed by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a Reserve Bank of India (RBI) subsidiary that insures deposits and provides credit guarantees.

When deposit matures
You can reinvest the remaining balance in a new deposit, transfer the funds to your savings account, or merely transfer the interest to your savings account and reinvest your initial investment in a new deposit.

Implications of booking a Fixed Deposit without PAN?
According to the Kotak Mahindra bank, in the absence of PAN, following are the implications for customers:

  • TDS will be recovered at 20% or the applicable higher rate (as against 10%)
  • NO TDS credit from the Income Tax department
  • NO TDS credit from the Income Tax department
  • Form 15G/H and other exemption certificates will be invalid and TDS at higher rates will apply

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