🚂 Current Fix Deposit Rates 🌞 SBI - General Citizen 3% to 7.10% Senior Citizen - 3.60% to 7.60% 🌞 HDFC - General - 3.00% to 7.25% Senior Citizen - 3.50% to 7.75% 🌞 ICICI - General - 3% to 7.10% Senior Citizen - 3.50% to 7.60% 🌞 PNB - General - 3.50% to 7.25% Senior Citizen - 4% to 7.75% 🌞 Kotak Mahindra - General - 2.75% to 7.20% Senior Citizen - 3.25% to 7.70% 🌞 Axis - General - 3.50% to 7.10% Senior Citizen - 3.50% to 7.85% 🌞 Bank of Baroda - General - 3% to 7.25% Senior Citizen - 3.50% to 7.55% 🚂 Current Recurring Deposit Rates 🌞 SBI - General 4.40% to 5.50% Senior Citizen 4.90% to 6.20% 🌞 ICICI - General 3.50% to 5.50% Senior Citizen 4% to 6.30% 🌞 HDFC - General 4.40% to 5.50% Senior Citizen 4.90% to 6.25% 🌞 KOTAK - General 4.30% to 5.20% Senior Citizen 4.80% to 5.70% 🌞 AXIS - General 4.40% to 5.75% Senior Citizen 4.65% to 6.50% 🌞 IDBI - General 7% to 7.15% Senior Citizen 7.50% to 7.65% ☁️ National Pension Scheme - 9% to 12% pa ☁️ Employees Provident Fund - 8.15% pa ☁️ Public Provident Fund - 7.1% pa Fixed Deposit

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Fixed Deposit

 

It is an investment where individuals can invest their money for certain fixed period or and as per the financial institution rules or it can be few months to many years,  even you can extend the FD after the completion of tenure  or expire.  Almost all the banks are offering such facility to their investors.  Those people are looking for safety and security of their investments then this is a very good investment option for them. 

Suppose Mr. Rohit has a surplus amount of money, let's say INR 500,000, that he doesn't require for immediate expenses. He decides to invest this money in a fixed deposit for a period of 3 years. He approaches xyz bank and opens a fixed deposit account.

Details of Mr. Rohit's Fixed Deposit:

Initial Investment: INR 500,000

Duration: 3 years

Interest Rate: 6% per annum

Based on these details, here's how Mr. Rohit's fixed deposit would work:

Principal Amount: INR 500,000

Interest Rate: 6% per annum

Interest Calculation: The interest is typically calculated on a quarterly basis for most fixed deposits. So, every quarter, the interest is calculated as (Principal Amount × Interest Rate × 3 months / 12).

First Quarter Interest: (500,000 × 0.06 × 3 / 12) = INR 7,500

Second Quarter Interest: (500,000 × 0.06 × 3 / 12) = INR 7,500

...and so on for each quarter.

Maturity Amount: The total amount Mr. Rohit  will receive at the end of the 3-year term will be the sum of the principal and the accrued interest.

Maturity Amount = Principal Amount + Total Interest Earned

Maturity Amount = 500,000 + (7,500 × 4 quarters) = INR 5, 30,000 for 1st year

...and so on for each year.

At the end of the 3-year tenure, Mr. Rohit will receive INR 5,98,340, which includes the initial investment of INR 500,000 plus the interest earned over the 3-year period.

For further calculation user finlifesecure calculator.

Some key features of fixed deposits:

FD Period:   An investor can choose a specific time period for FD, it can be for several days, months and year, during the period the money will remain locked in the fixed deposit with the financial institution.

FD Interest Rate:  The interest rate is fixed till the investment period over.  For example if the interest rate is 6.5% at the time of fixed deposit, it will be remains same till expiry date.  The interest rates may vary as per the banks or financial institutions or based on the tenure.

FD Fixed Returns:   Fixed deposit offers assured and fix returns as per the rules sets by financial institution.  It never changes and there is no link with market condition.

FD Safety:  It can be safe investment and insured under Deposit Insurance and Credit Guarantee Corporation.  A maximum insured deposit is Rs. 5 Lakhs.

FD Premature Withdrawal:   In case of an emergency or financial need, investor  can withdraw their amount before the maturity date by paying minimal penalty.

FD Interest Pay out Options:  Fixed deposit interest can be paid at the end of the period or as per their preference i.e., monthly, quarterly or annually.

FD Taxation: Tax deducted applicable as per the investor income tax slab.

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