Fixed Deposits: Your One-Stop Solution for Varied Financial Needs

Fixed deposits interest rates

Generally, everyone wants to invest their money in good saving plans to get the maximum returns on their savings. You always want to get higher returns on each rupee saved. Fixed Deposit interest rates are higher among all saving plans. There are few saving schemes, which are really popular among people and most the people save their money under such schemes. Fixed deposits is one of the most preferred ways to save money for long-term and getting the higher returns. You can save money in Fixed deposits according to your financial goals. There is no maximum amount limit to save money under fixed deposit. You can save as much as you want. You can opt for duration as per your financial goals. You can choose minimum duration of seven days to more than 10 years. This is the best option for those who doesn’t want to take risk with their money and want assured returns on their investments.

Fixed deposits also offer special features like tax saving benefits and higher rate of interest on FD for senior citizens. You will gain the interest of upto 9% in fixed deposits. However, the rate of interest vary from bank to bank. This is one of the most trusted and sought after scheme of saving your money. Here are some special features, benefits of different types of fixed deposits.

Features of fixed deposits

  • The key features of fixed deposit account is to enable the individual to earn a higher rate of interest on their surplus funds.
  • You can deposit the amount only once. If you want to invest more money, then you need to open a new fixed deposit amount.
  • Bank or the financial firm will provide you the fixed deposit receipt against your investment, which you have to produce at the time of maturity of the amount to claim it.
  • The interest on the deposited amount is calculated on the monthly or quarterly bases that automatically deposited in the account.
  • Fixed deposits also offer you tax benefits. You can claim the tax benefits if you have deposited the amount under tax benefits fixed deposit scheme for five years.
  • The maximum tax benefits can be claimed under section 80 C for maximum up to Rs. 1.50  lakhs per annum. But, there is no maximum limit to save the money under this scheme.
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Here is the list of banks with the rate of interest for 5 years tenure

Bank NameInterest Rate 
Karur Vysya Bank8.75%
Union Bank8.50%
Karnataka Bank8.50%
Canara Bank8.25%
Bank of Baroda8%

Tax saver fixed deposits:  If you have invested the money under fixed deposit for tax benefits. You can claim the same under Section 80C. The maximum limit for gaining the tax benefits in a financial year is Rs. 1.50 lakhs per annum. You can claim the tax benefits on the principal amount you have invested not on the compound amount. In this fixed deposit the money is invested for five years  at least. This is the minimum tenure required to claim the tax benefits. If you will withdraw the amount before the completion of the tenure, you can’t claim the tax benefits for the same. The minimum amount one can deposit is Rs. 100.There are different types of fixed deposits. You can choose the one as per your requirements and financial goals. Let’s take a look at few of them.

If you have opened a joint fixed deposit of similar tenure, the tax benefits can be claimed by the primary holder only.

To know more about Tax saving FD read 5 Years Fixed Deposits: Tax Benefits & Higher Returns

Loan against fixed deposit: If you are in urgent need of money and you want to take a loan against the fixed deposit with the bank. It is given in the form of an overdraft against your deposited amount. This is the best option in case you are short of money and you want to break your fixed deposit before the tenure.

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The loan against the fixed deposit is good option because it can help you in getting the loan at lower rate of interest and you can negotiate with the bank to get a lower rate of interest on your loan amount. If you will avail a personal loan to meet your financial requirements, you will get a loan on the rate of 14% to 30%, whereas here you will get a lower rate of interest. The interest rates charged by the bank on the loan is 2-2.5% higher than the interest paid by the bank on the fixed deposits.

Generally, banks offer a loan against your fixed deposit from 70% to maximum 90% of the deposited amount. There is no set  bar for the loan amount, the amount may vary from bank to bank and also upon the deposited amount.

Credit card against fixed deposits: There are banks that offers you credit cards against your fixed deposits to improve your credit scores or manage credit more responsibly. However, the credit card is offered to those customers who are trustworthy and have good image with banks according to their deposit status and credit history. If you have a bad credit history, lower credit score, faulty track of paying dues and default payments there are high chances that bank will not offer you a credit card.

Credit card against fixed deposits benefits & features

Higher credit limit: The banks offer you a good credit card limit. The limit is fixed at a percentage of amount held as FD. But, in some cases, it can be upto 100% against the FD amount. For instance: if you have deposited Rs. 1,00,000 in fixed deposit. In general case, your higher credit limit for the card would be Rs. 80,000.

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Rate of interest: The FD rate of interest is compared to lower than the regular credit cards.

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Personal Loan Interest Rates September 2023
Fullerton India12.00% - 24.00%
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates September 2023
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.85% - 9.40%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%