Best FD Interest Rates in India [Dec-2020]

Best Fixed Deposit (FD) interest Rates in IndiaBest & Highest Fixed Deposit (FD) interest rates in Dec-2020

Banks are reducing fixed deposit interest rates in the last few months. If investors are looking for large commercial banks, these are offering very low interest rates up to 5%. Recently large banks like SBI, ICICI Bank, etc., have reduced significant interest rates on their FDs. If you are conservative investors or senior citizens and dependent on fixed income, such low interest rates would impact you. Which are the best bank fixed deposit rates in India in 2020? Which banks are offering higher FD interest rates for 1 to 5 year period?

Also Read: 3 AAA Rated Fixed Deposits offering up to 8.4% interest rates

Best FD interest rates for 1 year

Here are the highest FD interest rates for a 1 year tenure. These FD rates are between 4.15% to 7% per annum. Indusind Bank offers highest FD rate of 7% for 1 year fixed deposits.

Bank Interest Rate Rs 1 Lakh would grow to
IndusInd Bank 7.00% 107,186
Yes Bank 6.75% 106,923
RBL Bank 6.75% 106,923
DCB 6.50% 106,660
Bandhan Bank 5.75% 105,875

Best FD interest rates for 2 years

Here are the highest FD interest rates for a 2 year tenure. These FD rates are between 4.15% to 7% per annum. Yes Bank and Indusind Bank offer highest FD rate of 7% for 2 year fixed deposits.

Bank Interest Rate Rs 1 Lakh would grow to
IndusInd Bank 7.00% 114,888
Yes Bank 7.00% 114,888
RBL Bank 6.75% 114,325
DCB 6.80% 114,437
SBM Bank 6.50% 113,764

Best FD interest rates for 3 years

Here are the highest FD interest rates for a 3 year tenure. These FD rates are between 4.15% to 7.5% per annum. SBM Bank offers 7.5% and RBL Bank + DCB offers 6.95% which are highest FD rate for 3 year fixed deposits.

Bank Interest Rate Rs 1 Lakh would grow to
SBM Bank 7.50% 124,972
RBL Bank 6.95% 122,963
DCB 6.95% 122,963
IndusInd Bank 6.75% 122,239
Yes Bank 6.50% 121,341

Best FD interest rates for 5 years

Here are the highest FD interest rates for a 5 year tenure. These FD rates are between 4.15% to 6.95% per annum. DCB Bank offers 6.95% and Indusind bank offers 6.75% which are highest FD rates for 2 year fixed deposits.

Bank Interest Rate Rs 1 Lakh would grow
DCB 6.95% 141,131
IndusInd Bank 6.75% 139,750
India Post Office 6.70% 139,407
RBL Bank 6.50% 138,042
Yes Bank 6.50% 138,042
SBM Bank 6.5% 138,042

FAQS on Fixed Deposit Interest Rates

What is the minimum and the maximum FD amount?

Minimum FD amount would defer bank to bank. Many FDs you can open as low as Rs 500. There is no maximum FD investment limit.

What is the tenure of the FD one can open?

Investors can open FD of 7 days to 10 years tenure. Banks would not offer FDs beyond 10 years.

Would interest rate change once I invest in FD?

No. While opening FD, it would display the interest rate to you. This rate would continue till FD tenure.

What are fixed deposit interest rates in the Post Office?

Post office offers fixed deposits from 1 to 5 year period. Here are the latest fixed deposit interest rates in the post office in 2020.

1 year – 5.5%

2 years – 5.5%

3 years – 5.5%

5 years – 6.7%

You can check Post Office Fixed Deposits details here.

What are fixed deposit interest rates in SBI?

SBI offers lowest FD interest rates. Current it offers 5.4% for 5 to 10 years tenure. Senior citizens would get 0.5% higher interest rates.

What about HDFC FD interest Rates?

HDFC FD interest rates are also low. It offers between 5.1% 5.5% FD interest rates for 1 to 10 years FD tenure. It offers 0.5% higher interest rates for senior citizens.

How much we get monthly interest for 1 lakh fixed deposit?

This would depend on the tenure as well as the bank which you choose. Let us assume you chose 5 year tenure FD

i) Post office FD offers 6.7%. One can get Rs 558 per month (this based on monthly rest interest rate computation and this can vary).

ii) Jana small finance bank offer 7%. One can get Rs 583 per month (this based on monthly rest interest rate computation and this can vary).

Is Post Office FD Safe?

Post office / small saving schemes are offered by Govt of India, hence Post office FDs are safe to invest. Currently it offers 5.5% to 6.7% for 1 to 5 years FD schemes.

Which bank has highest FD interest rate?

This would depend on the tenure which you want to invest. If you want to invest for 1 year, check for 1 year FD interest rates, etc., in the above tables.

How is the interest paid on bank fixed deposits?

One needs to choose cumulative FD or non cumulative FD. In non cumulative FD, interest would be paid either quarterly or half yearly or yearly  and cumulative option, interest is paid on maturity.

Is FD interest taxable?

FD interest is taxable in the hands of investors. They need to pay interest based on income tax applicable to them. The bank would deduct TDS at 10%. However, if TDS is not applicable to the investor, they can submit appropriate form 15H/15G (whatever is applicable) at the time of opening the FD.

Is Premature withdrawal can be done in FD?

One can do premature withdrawal at a click of a button online. However, for tax saver FDs, there is a lock-in period of 5 years. Also banks would charge premature withdrawal charges that would vary bank to bank along with lower interest rates.

Can I get a loan on Bank Fixed Deposits?

Generally, investors would have locked their FDs with higher rates. However, they might be in urgent need of money for short term. They do not want to disturb their FDs. Here comes the loan on FD feature. One can use FD as collateral to obtain loans. Banks would provide loans on FDs up to 80% of the FD investments. Interest rates would be higher than the FD interest rates.

You may like: What are the credit ratings in Fixed Deposits?

Which are the best FD interest rates for Senior Citizens?

The above indicated interest rates list is for general category. Most of the banks offer 0.5% higher interest rates compared to these rates to Senior citizens. If you are a senior citizen, you can consider one of the above bank fixed deposits.

Which bank is safe for FD?

Many of us think that only public sector banks are safe for FD as we have a doubt about either private banks or small finance banks. All banks are governed by RBI, including small finance banks. Deposit insurance is available to all banks up to Rs 5 Lakhs in case anything happens to these banks. Hence, one can safely invest in public sector banks and private banks / small finance banks. One of the best ways to safeguard is to invest Rs 5 Lakhs maximum in each bank by each person. E.g. if you want to invest Rs 10 Lakhs, the best way is to invest in  2 different banks. If you want to invest Rs 20 Lakhs, you can either invest in 4 different banks or 2 different banks along with spouse (Rs 5 Lakhs x 2 banks x Self + Spouse)

Is Yes Bank safe now?

Yes Bank went into crisis few quarters back. Post this crisis, SBI has taken over the control. Hence it can be considered as safe as of now.

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Suresh KP


  • Priya Suresh


    Both my mother (80 years) and mother in law (78 years) are dependent on us. They do not have pension and no medical insurance. Can you please suggest a suitable policy that will offer a decent medical coverage ?

    • Hello Priya, Below are some of the good health insurance plans available for Sr. Citizens upto 80 years.

      1) Apollo Munich Optima Senior
      2) New India Assurance Senior Citizen Health Claim Policy
      3) Oriental Insurance – Health of Privileged Elders (HOPE) – Senior Citizens policy
      4) National Insurance – Varishtha Mediclaim Policy for Senior Citizens

      We have written one article here (link here) which you can go through about features. The premiums keep changing, hence you need to check with health insurance company for latest premiums.

  • Siddhartha Bhattacharya

    Can i survive 1.5 crore rs without no others income. I have only son and wife
    and i am unemployment. I have own 100 years old house in kolkata. I have a only sister. She is unmarried and she is working in govt college in kolkata. My father was ex prof of history in university of north bengal.He has expired on 8th jan 2019. My mother has expired earlier. My current age is 45 years.My wife is home-maker and my son is currently studies at class 3.My amount is invested mostly in post office(1 yr TD)

    • Hello Siddartha, Since you have own house, you don’t need to pay rent. With Rs 1.5 Crores investing in post office can earn decent money of Rs 10 lakh per year (5 years FD). You need to assess, what are your monthly expenses / yearly expenses. These expenses can increase year on year due to inflation, however your investment would also get interest. Assume both would get set-off.
      1) What are your monthly expenses 2) Are there any financial goals you wish to fulfill in the coming years, if yes what is their value 3) Considering the life expectancy till 80 years, you would need to survive for 45 years with this Rs 1.5 Crore + any extra savings you would make year on year from post office interest. You need to estimate these things to understand how well you can plan with your current savings.

  • Prasad

    Your articles are excellent Sir & you are helping public very much.

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