Fixed deposit rates vary across banks and also depend on the amounts and lock-in periods. Rates offered by top banks in India have some variations based on the time period.
Here are the interest rates offered by various banks on fixed deposits of one-year, three years and five years.
The highest interest rate offered on deposits for a one-year period is 7.25% by Yes Bank, while Bank of Baroda and Canara Bank offer the second highest at 6.85%.
HDFC Bank Ltd. and Axis Bank Ltd. offer the least interest rates on FDs of one year. Punjab National Bank offers 6.8% and ICICI Bank Ltd. offers 6.7% for a one-year period. Kotak Mahindra Bank Ltd. offers 6.5%.
In the three-year category, Yes Bank offers the best interest rate of 7.75%. Canara Bank offers 7.3%, while Kotak Mahindra Bank and Bank of Baroda offer 7.15% on three-year deposits. The lowest rate of 7% is offered by HDFC Bank, ICICI Bank and PNB.
In the five-year category, Yes Bank and Canara Bank offer the highest at 7.4%. The second-highest offering for this time frame is by Axis Bank, which offers 7.1%. HDFC Bank, ICICI Bank and Kotak Mahindra Bank offer 7% interest. Bank of Baroda offers 6.8% interest, and the lowest offering is by PNB.
Interest rates on fixed deposits are usually less than 8%, but interest rates on fixed deposits without a premature withdrawal option tend to be higher than the ones with a withdrawal facility.
These are also known as non-callable deposits. The difference is that a fixed-term deposit will not allow a withdrawal facility for depositors before completion of the maturity period.
Term-deposit interest rates are higher due to the lock-in period that these come with. Before deciding to park one's money in a fixed deposit, it is important to have clarity on the time period.
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