Best Fixed Deposit (FD) interest rates in Banks – January 2021
Banks have been reducing FD interest rates in the recent times. Many large commercial banks are offering up to 5.5% interest rates only. If you are a low risk investor and depending on such Fixed deposits, such rates would scare you. Many of us would stick to the fixed deposits offered by the bank where we have our SB account. Instead of this, one can check bank FD rates, which are high and lock it for medium to long term. Which are the Best FD interest rates in banks that are offering up to 7.5% interest rates?
Also Read: Best FD interest rates in Post Office
Best FD interest rates in Jan 2021 – 6.5% to 7.5%
Let me provide you the best FD interest rates offered by banks. Please note that we have excluded IDFC First Bank which is offering 7% on Savings account, however all its FD rates are below 6%. If you are still okay to keep money in SB account, you can consider IDFC First bank too.
Best FD interest rates for 1 Year
The highest fixed deposit interest rate is 6.5% for 1 year. All these banks are offering single rate of 6.5% except DCB which offers 0.25% lower interest. Since these fixed deposits are compounded every quarter, one can see higher maturity amount compared to the FD rate offered.
| Bank | Interest Rates % | ₹ 1 Lakh would grow to |
|---|---|---|
| IndusInd Bank | 6.50% | 106,660 |
| Yes Bank | 6.50% | 106,660 |
| RBL Bank | 6.50% | 106,660 |
| SBM Bank | 6.50% | 106,660 |
| DCB | 6.25% | 106,398 |
Best FD interest rates for 2 Years
All these banks are offering 6.5% single interest rate. Since these fixed deposits are compounded every quarter, one can see higher maturity amount compared to the FD rate offered.
| Bank | Interest Rates % | ₹ 1 Lakh would grow to |
|---|---|---|
| DCB | 6.50% | 113,764 |
| IndusInd Bank | 6.50% | 113,764 |
| Yes Bank | 6.50% | 113,764 |
| RBL Bank | 6.50% | 113,764 |
| SBM Bank | 6.50% | 113,764 |
Best FD interest rates for 3 Years
The interest rate is ranging between 6.5% to 7.5%. The highest fixed deposit interest rate is 7.5% for a 3 year FD offered by SBM Bank. Again, one can see higher maturity amount compared to the FD rate offered due to compounding of FD every quarter.
| Bank | Interest Rates % | ₹ 1 Lakh would grow to |
|---|---|---|
| SBM Bank | 7.50% | 124,972 |
| DCB | 6.75% | 122,239 |
| RBL Bank | 6.75% | 122,239 |
| Yes Bank | 6.75% | 122,239 |
| IndusInd Bank | 6.50% | 121,341 |
Best FD interest rates for 5 Years
The highest fixed deposit interest rate is 6.75% for a 5 year fixed deposit offered by DCB and Yes Bank. The interest rate is ranging between 6.5% to 6.95%. Again, maturity amount is high compared to the FD rate offered due to compounding of FD every quarter.
| Bank | Interest Rates % | ₹ 1 Lakh would grow to |
|---|---|---|
| DCB | 6.75% | 139,750 |
| Yes Bank | 6.75% | 139,750 |
| India Post Office | 6.70% | 139,407 |
| IndusInd Bank | 6.50% | 138,042 |
| SBM Bank | 6.50% | 138,042 |
FAQs about FD interest rates in India
What are the best FD interest rates for Senior Citizens?
Senior citizens would get 0.25% to 0.5% higher interest rates compared to regular investors. Here is the Best FD rates table for Senior Citizens.
| Bank | 1 Year | 2 Year | 3 Year | 5 Year |
|---|---|---|---|---|
| Yes Bank | 7.0% | 7.0% | 7.5% | 7.5% |
| DCB | 6.75% | 7.0% | 7.25% | 7.25% |
| IndusInd Bank | 7.0% | 7.0% | 7.0% | 7.0% |
| SBM Bank | 7.0% | 7.0% | 8.0% | 7.0% |
| RBL Bank | 7.0% | 7.0% | 7.25% | 6.9% |
Which are the best FD interest rates in small finance banks?
You might think there are several best FD interest rates in small finance banks and why we have not considered. As indicated in our earlier articles, investors have still not gained confidence about small finance banks, hence we have not indicated in the above list.
Which are the best FD rates in post office?
Post office offers fixed deposits which are called term deposits. Here are the best FD rates in post office.
Post Office 1 Year FD – 5.5%
Post Office 2 Year FD – 5.5%
Post Office 3 Year FD – 5.5%
Post Office 5 Year FD – 6.7%
Also Read: Best SIP Mutual Funds to invest in 2021
Should you lock your FD for the long term?
In the last couple of years, RBI has reduced repo rates and there is reduction in bank fixed deposit rates. We expect that interest rates are expected to further fall in coming years. If you are a low risk investor or investor who depend on a fixed income, one can lock fixed deposits at current FD interest rates.
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7 comments
Add a comment ↓The interest rates are very low and do not even cover inflation .The pity is even the SB a/c interest is taxable.The most affected are senior citizens who survive solely on income from deposits.The income of senior citizens has reduced to 50% of what it was 6 years back.Is it the intention of govt is to reduce the population of senior citizens?
A deposit in bank or post office is practically is a donation for the govt.
Problem is once you open an account with a bank, can you change or open another just for the sake of FDs’. Unless you have SB with them no bank will allow FD. Then kyc, minimum balance and all those head aches will follow. Some of these banks charge you Rs.20 per month for SMS, some charge for neft and some are even blocking your SB account for not being KYC compliant.
Krish, These days opening an SB account is just 15 mts job by sitting in front of hte computer. I personally opened this for Indusbank as an example
Yes, one need to check any additional charges and minimum balance T&C before opting. Regd KYC, these days every bank is moving towards video KYC, hence in coming months, all banks might follow similar approach
Idfc first bank??
IDFC Bank FD rates are less than 6% for < 5 years period. They are offering higher interest rates on Savings account, but not on FD account. Means, you can keep money in SB account and get high interest, but if you do FD, you would get low interest rates
Sir ,wrt your mail dtd 12/01/2011
I need a clarification.In sr ctzn FD you have mentioned about SBM bank.As SBM is merged with SBI ,SBM no more exists.Is it SBI rates. or SBM is a different bank.Pl reply.
Hello Seshasayee, SBM bank is NOT State Bank of Maharastra (that is merged with SBI). This is new bank (termed as SBM Bank and not SBM) that has come in India, hence they are providing higher rates.