FD rates in November 2024: Highest interest from private and public banks

In November 2024, fixed deposit (FD) interest rates across India continue to vary across private and public sector banks, driven by factors such as tenure, deposit amount, and the age of the depositor. Most notably, senior citizens benefit from preferential rates, generally 0.5% higher than standard rates, offering a better yield to those over 60 years of age.

Private sector banks lead the pack, with top rates ranging from 6.7% to 8.1% for tenures between one and five years. Among the best offerings, Bandhan Bank provides an impressive 8.05% interest for a one-year FD, while IndusInd Bank and RBL Bank follow with rates of 7.75% and 8.1% for tenures between one and two years. For investors seeking three-year tenures, DCB Bank offers 7.55%, and RBL Bank also stands out with consistent rates across its FD tenures.

Here’s a breakdown of leading private bank FD rates:

1. Axis Bank

• 1-year: 6.70%
• 3-year: 7.10%
• 5-year: 7%
• Highest rate: 7.25% (15 months to less than 2 years)

1. Bandhan Bank

• 1-year: 8.05%
• 3-year: 7.25%
• 5-year: 5.85%
• Highest rate: 8.05% (1 year)

1. DCB Bank

• 1-year: 7.10%
• 3-year: 7.55%
• 5-year: 7.40%
• Highest rate: 8.05% (19-20 months)

1. IndusInd Bank

• 1-year: 7.75%
• 3-year: 7.25%
• 5-year: 7.25%
• Highest rate: 7.75% (1-2 years)

1. RBL Bank

• 1-year: 7.50%
• 3-year: 7.50%
• 5-year: 7.10%
• Highest rate: 8.10% (500 days)

Public sector banks offer competitive rates, with select banks such as Central Bank of India and Punjab & Sind Bank reaching above 7% for specific durations. Here are some key FD rates from public banks:

1. Bank of Baroda

• 1-year: 6.85%
• 3-year: 7.15%
• 5-year: 6.80%
• Highest rate: 7.30% (400 days – Bob Utsav)

1. Bank of Maharashtra

• 1-year: 6.75%
• 3-year: 6.50%
• 5-year: 6.50%
• Highest rate: 7.40% (333 days)

1. Central Bank of India

• 1-year: 6.85%
• 3-year: 6.75%
• 5-year: 6.50%
• Highest rate: 7.45% (444 days)

1. Punjab National Bank

• 1-year: 6.80%
• 3-year: 7%
• 5-year: 6.50%
• Highest rate: 7.25% (400 days)

Fixed deposits come in two types: with and without a premature withdrawal option. Deposits without this option often offer higher interest rates, as banks have more certainty in fund management. “FDs without withdrawal options offer better rates because banks can invest the money more effectively, ensuring stability,” explains Adhil Shetty, CEO of Bankbazaar.com.

For instance, a bank may offer 7% on a 5-year FD with a withdrawal option but 7.5% on a no-withdrawal option. Over a 5-year period, this difference can lead to a higher maturity amount, incentivizing depositors to lock in their funds. This benefits both the bank, which gains stability, and the depositor, who earns more interest.

Tax Implications on FD Interest

FD interest in India is subject to tax based on the depositor’s income tax slab. Banks deduct TDS at 10% if the interest exceeds Rs 40,000 (Rs 50,000 for senior citizens). For example, if a depositor earns Rs 75,000 in interest, TDS would be Rs 7,500. Depositors with incomes below the taxable limit can submit Form 15G or 15H to avoid TDS.

Key Considerations for FD Investors:

1. Lock-in Period: Select an FD tenure that aligns with financial goals.
2. Interest Rate Variations: Compare rates across banks before locking in an investment.
3. Penalties for Premature Withdrawals: Choose an FD type that matches your need for flexibility.

Fixed deposits offer a reliable investment option for conservative investors seeking steady returns.