Looking To Set Up A Fixed Deposit? Compare Top Banks Interest Rates Here

Top lenders in the country currently provide annual returns to the tune of 2.5-5.5 per cent (FDs) to retail fixed depositors. Retail term deposits - or fixed deposits - are investment instruments in which money is locked in for a pre-defined, "fixed" period of time - say a year - for a guaranteed return. This is why many traditional investors, with a rather limited or no risk appetite, prefer modest but guaranteed returns, instead of possible higher returns in case of equities or equity-related funds.

Commercial lenders - from the likes of State Bank of India (SBI), HDFC Bank and Kotak Mahindra Bank - currently provide a slew of maturity options for retail fixed deposits, which are fixed deposits up to Rs 2 crore. These interest rates are aligned with benchmark rates - set by the Reserve Bank of India (RBI) - from time to time.

This year, the RBI has reduced the repo rate - or the key interest rate at which it lends money to banks - by a total of 115 basis points since February, on top of 135 basis points last year.

This has also forced banks to lower their FD rates.

Here's a look at the current interest rates on retail fixed deposits provided by the country's largest banks by market capitalisation:

SBI

HDFC Bank

Kotak Mahindra Bank

ICICI Bank

Most lenders provide slightly higher interest rates to senior citizens compared to other customers. For example, the country's largest bank by assets, SBI, pays annual returns to the tune of 3.4-6.2 per cent on fixed deposits up to Rs 2 crore to senior citizens, and 2.9-5.4 per cent to other depositors