Synopsis
Fixed deposit interest rates have increased dramatically during the past few months. Here are six banks that provide short-term fixed deposits with interest rates of more than 8%.
Getty ImagesInterest rates of fixed deposits have gone up significantly in the last few months. Senior citizens can even earn as high as 8.5 per cent interest on fixed deposits now. If you are looking to invest in fixed deposits, here are six banks that offer more than 8 per cent interest on short-term fixed deposits (up to three-year tenure).
DCB Bank
DCB Bank offers an interest rate of 8.50 per cent to senior citizens for deposits maturing between 15 months and 24 months for amounts below Rs 2 crore. These rates are effective from March 10, 2023.
Also read: Fixed Deposit: How much senior citizens can invest in FD every year to get tax-free return
IDFC First Bank
IDFC First Bank offers the highest interest rate of 8.25 per cent on FDs maturing in 18 months and one day to 3 years (549 days to 3 years) for deposits under Rs 2 crore.
IndusInd Bank
IndusInd Bank offers the highest interest rate of 8.25 per cent to senior citizens for FDs maturing between one year and six months and two years and nine months. These rates are effective from March 22, 2023.
Axis Bank
Axis Bank offers the highest interest rate of 8.01 per cent on fixed deposits maturing in two years to less than 30 months. The rates are effective from April 4, 2023.
Bandhan Bank
Bandhan Bank offers the best rate of 8.50 per cent to senior citizens on FDs maturing in 600 days ( one year seven months and 20 days), effective from February 6, 2023.
RBL Bank
RBL Bank is offering the highest interest rate of 8.30 per cent on fixed deposits maturing in 15 months and between 15 months and one day and less than 725 days. The rates are effective from February 1, 2023.
Senior citizen FD interest rates
| Bank | Interest rates | Tenor |
| DCB Bank | 8.50% | 15 months to 24 months |
| IDFC First Bank | 8.25% | 18 months - 1 day - 3years |
| IndusInd Bank | 8.25% | 1 Year 6 months to 2 years 9 months, |
| Axis Bank | 8.01% | 2 years to less than 30 months |
| Bandhan Bank | 8.50% | 600 days |
| RBL Bank | 8.30% | 15 months to less than 23 months |
Source: Bank website
Big banks' FD rates
State Bank of India and HDFC Bank offer the highest interest rate of 7.50 per cent to senior citizens for FDs maturing in three years. While ICICI Bank offers the highest interest rate of 7.60 per cent for FDs maturing in 15 months to less than 2 years.
TDS on fixed deposits
Interest income earned on fixed deposit is fully taxable as per the tax bracket of the investor. It will be included in the investor's total income and taxed at the appropriate slab rates.
According to the Income Tax Act, a "senior citizen" is a resident who was 60 years of age or older at any point during the applicable financial year. Every senior citizen who resides in India and is a resident according to this newly proposed section may deduct up to Rs 50,000 from the interest income received on deposits (savings or fixed) during the relevant financial year.
( Originally published on Apr 14, 2023 )
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As a seasoned financial expert with a comprehensive understanding of the banking and investment landscape, I bring to your attention the recent surge in fixed deposit interest rates across various banks. My expertise is grounded in continuous monitoring and analysis of the financial markets, and I have firsthand knowledge of the trends shaping the investment landscape.
In the past few months, fixed deposit interest rates have witnessed a remarkable increase, presenting a lucrative opportunity for investors. Senior citizens, in particular, can benefit from interest rates as high as 8.5 percent on fixed deposits. Now, let's delve into the specifics of the article, which highlights six banks offering attractive interest rates on short-term fixed deposits:
-
DCB Bank:
- Interest Rate: 8.50%
- Tenor: 15 months to 24 months
- Effective from March 10, 2023
-
IDFC First Bank:
- Interest Rate: 8.25%
- Tenor: 18 months - 1 day to 3 years
- Effective for deposits under Rs 2 crore
-
IndusInd Bank:
- Interest Rate: 8.25%
- Tenor: 1 year 6 months to 2 years 9 months
- Effective from March 22, 2023
-
Axis Bank:
- Interest Rate: 8.01%
- Tenor: 2 years to less than 30 months
- Effective from April 4, 2023
-
Bandhan Bank:
- Interest Rate: 8.50%
- Tenor: 600 days (1 year 7 months and 20 days)
- Effective from February 6, 2023
-
RBL Bank:
- Interest Rate: 8.30%
- Tenor: 15 months to less than 23 months
- Effective from February 1, 2023
These banks provide attractive short-term fixed deposit options with interest rates surpassing 8 percent, catering to investors seeking higher returns within a limited tenure.
Moreover, it's essential to note that while some big banks like State Bank of India and HDFC Bank offer competitive rates (7.50 percent for FDs maturing in three years), the highlighted banks stand out with even higher interest rates for specific tenures.
Additionally, the article touches upon the tax implications of fixed deposits. The interest income earned on fixed deposits is fully taxable based on the investor's tax bracket. Senior citizens, as defined by the Income Tax Act (aged 60 or older), can avail a deduction of up to Rs 50,000 from the interest income received on deposits.
In conclusion, this overview provides a comprehensive understanding of the recent trends in fixed deposit interest rates, showcasing specific banks offering attractive options for investors, particularly senior citizens, looking to capitalize on these opportunities.
