Bank FDs are potent investment options for investors seeking capital safety and steady returns. However, bank FDs offer nominal interest rates, which cannot outpace inflation. So, if you’re looking for the best fixed deposit in India, you should consider a Bajaj Finance FD instead. These fixed deposits offer attractive interest rates of up to 8.60% p.a. for flexible tenures ranging from 12 to 60 months. Additionally, FDs from Bajaj Finance come with the highest safety and credibility ratings, ensuring capital protection.

• AAA-rated Bajaj Finance FDs offer interest rates of up to 8.60%.
• Investors can enjoy higher rates for special tenures of 18, 22, 33, 42, and 44 months.
• Other perks include flexible interest payout options, loanability, and end-to-end digital processing.

The following table provides an overview of various banks offering competitive FD interest rates:

Note: Interest rates are subject to change. Please verify the latest rates with the respective banks.

When selecting a fixed deposit scheme, it's essential to evaluate several factors to ensure it aligns with your financial goals:

1. Deposit Limit

Banks may have minimum and maximum deposit limits for FDs. Understanding these limits is crucial, especially if you plan to invest a substantial amount. Some banks offer higher interest rates for larger deposits, while others may have caps on the maximum deposit amount.

2. Interest Rates

Interest rates vary across banks and are influenced by the tenure of the deposit. Generally, longer tenures attract higher interest rates. It's advisable to compare rates from different banks to maximize returns. Additionally, senior citizens often receive higher interest rates, typically ranging from 0.25% to 0.65% above the standard rates.

3. Liquidity

FDs are time-bound investments, and premature withdrawals may attract penalties or reduced interest rates. Assess your liquidity needs before choosing the tenure to avoid potential penalties. Some banks offer Flexi Fixed Deposits, which link your savings account to the FD, providing liquidity benefits.

4. Tax Benefits

Certain FDs, like tax-saving fixed deposits, offer tax deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh per annum. However, these come with a lock-in period of five years. Interest earned on FDs is taxable, and banks may deduct Tax Deducted at Source (TDS) if the interest income exceeds the specified threshold.

5. Tenure

FD tenures range from as short as seven days to as long as ten years. Choose a tenure that aligns with your financial goals and liquidity requirements. Short-term FDs offer lower interest rates but provide quicker access to funds, while long-term FDs offer higher rates but lock in your funds for extended periods.

1. Axis Bank

Axis Bank, one of India's leading private sector banks, offers a range of FD options with competitive interest rates. The bank provides flexibility in tenure, ranging from seven days to ten years, catering to both short-term and long-term investment needs. Senior citizens enjoy an additional interest rate benefit, making it a favorable option for retirees seeking steady income.

2. Bandhan Bank

Bandhan Bank offers FDs with tenures ranging from seven days to ten years. The bank provides attractive interest rates, with higher rates for senior citizens. Bandhan Bank's FD schemes are designed to cater to various customer segments, ensuring flexibility and competitive returns.

3. Bank of Baroda

As a prominent public sector bank, Bank of Baroda offers FD schemes with tenures from seven days to ten years. The bank provides competitive interest rates, with additional benefits for senior citizens. Bank of Baroda's FDs are known for their reliability and customer-friendly features.

4. Canara Bank

Canara Bank offers a variety of FD schemes with tenures ranging from 15 days to ten years. The bank provides attractive interest rates, with higher rates for senior citizens. Canara Bank's FDs are designed to meet the diverse needs of investors, offering both security and good returns.

5. HDFC Bank

HDFC Bank, a leading private sector bank, offers FD schemes with tenures ranging from 33 to 99 months. The bank provides competitive interest rates, with additional benefits for senior citizens. HDFC Bank's FDs are known for their flexibility and customer-centric features.