Fixed Deposit Account
Banks and non-banking financial institutions (NBFCs) offer investment instruments called fixed deposits or FDs. This is a type of term deposit in which you can deposit money at a higher interest rate compared to a savings account. The money in FD can be invested between 7 days and 10 years at a fixed interest rate.
Features of a Fixed Deposit Account:
- It allows you to earn interest for a fixed period of time.
- Flexible tenure up to 10 years.
- There is no cap on the maximum deposit.
- Additional interest rates and other benefits for senior citizens.
- The capability of earning more interest than FD savings account
- Only one-time lump sum deposit is allowed in an FD
- TDS is applied on the interest on FDs
- Flexibility in the deposit amount and tenure for investors
- Up to Rs.1, 50,000 of tax deduction under Sec 80C.
But, what is the interest rate for fixed deposit is a question asked in abundance. And we’ll try answering this question in this article. Please read along.
What is the interest rate for fixed deposit?
When a person invests his surplus funds in an FD, the FD provider offers him a fixed rate of interest on those funds and that is called the interest rate on fixed deposit. You may earn interest on fixed deposits according to applicable terms and conditions of the bank or NBFC whatever you choose. However, this rate of interest remains the same for the entire FD tenure be it 7 days or 10 years.
Apart from the choice of provider below are the factors on which interest rate for fixed deposits depends:
- Your principal amount or deposit: High interest comes from high deposits.
- Deposit tenor: Longer the tenor higher would be the FD interest rates.
- Type of deposit (Cumulative or non-cumulative): Cumulative FDs are preferred for greater interest.
- Frequency of interest payout: You can compound your interest on per month, quarterly, half-yearly or on an annual basis with Bajaj Finance Fixed Deposits. However, compounding your FD interest rates frequently might decrease the amount of interest you earn.
- Type of customer (Senior citizen, new or existing customer): FD interest rates for senior citizens are always higher as compared to regular customers. For instance: Bajaj Finance Fixed Deposits offer an additional 0.25% senior citizen FD rates.
Calculation of Interest on Fixed Deposit
By using the following formula we can do all the calculation manually and estimate interest on FD:
A = P * (1+ r/n) ^ n*t, where, Interest earned amount = A – P and
- A Stands for Maturity
- P stands for Principal or investment amount
- r stands for rate of interest
- t stands for tenure
- n stands for Compounded interest frequency
With so many factors to consider, the calculation of FD interest becomes laborious. So to help you save time and efforts Bajaj Finance provides you with the facility of FD maturity calculator.
What is Bajaj Finance FD maturity Calculator?
Bajaj Finance FD maturity calculator is an online tool that helps you in estimating your overall FD returns and interest earned during maturity. The whole process of calculating the sum is easy and hassle-free.
All you have to know is what is the interest rate for fixed deposit, your deposit amount, your type of FD: cumulative or non-cumulative and lastly the amount of the investment, and you can calculate your overall FD returns in a few minutes.
Here is the table by which we can collate regular and senior citizen FD rates.
|Banks||FD Rate of Interest||Senior Citizen FD Rates|
|Bajaj Finance||7.40% – 7.60%||7.65% – 7.85%|
|HDFC||7.30% – 7.55%||7.55% – 7.55%|
|Axis Bank||3.50% – 6.75%||3.50% – 6.75%|
|ICICI Bank||3.50% – 6.50%||4.00% – 6.50%|
|SBI||3.50% – 6.20%||4.00% – 6.20%|
With CRISIL’s FAAA/Stable rating and ICRA’s MAAA (stable) rating, your investments in Bajaj Finance FDs are never at risk. Apart from the highest FD interest rates in India as shown in the table, Bajaj Finance FDs offer you numerous benefits such as online application of FDs, the facility of loan against fixed deposits, premature withdrawal etc.
So, start investing in Bajaj Finance Fixed Deposits with a minimum deposit of Rs. 25,000 and enjoy interest rates up to 7.85%.
Also, you can utilise the Bajaj Finance FD Calculator to easily comprehend which banks or NBFCs are providing the best interest rate as per your choice of tenure and thus compare and choose the best.
Now, what is the interest rate for fixed deposits in a post office? Look at the table below to know post office FD rates for different tenures.
|Deposit tenure||Post Office FD rates (p.a)|
Summing up, we hope this article well answers your question of what is the interest rate for fixed deposit.