Fixed deposits are the most popular investment but not the best investment because of low interest rates. However you can invest in FDs for a short term goal to save money for an upcoming expense and earn interest on that money.
Let’s discuss a few important things about FDs –
- You can save income tax through the tax-saving fixed deposits under 80C. They have a fixed tenure of 5 years with a maximum investment limit of Rs 1,50,000.
- If your interest income exceeds Rs 10,000 per bank in a financial year, the bank deducts 10% TDS on the interest earned.
- The banks charge a fee for premature mature withdrawal that varies from bank to bank.
It’s time to get into the depth of different bank’s FD interest rates.
Best Highest Fixed Deposit Interest Rates
Let’s compare the top 11 banks/companies in India that allow you save more money with higher FD interest rates. If you check the table below none of the commercial bank is in the top-3 positions because a very few commercial banks offer you decent FD interest rates.
I have curate below the list of top 11 highest FD interest rates paying banks/companies.
| Bank | Interest Rate Individual (1 Yr) | Interest Rate Senior Citizen (1Yr) |
| Ujjivan Small Finance Bank | 8.00% | 8.50% |
| Bajaj Finserv | 7.60% | 7.85% |
| AU Small Finance Bank | 7.30% | 7.80% |
| Yes bank | 7.25% | 7.75% |
| IDFC First Bank | 7.25% | 7.75% |
| Lakshmi Vilas Bank | 7.10% | 7.35% |
| Bandhan bank | 6.75% | 7.50% |
| RBL Bank | 6.75% | 7.25% |
| Indian bank | 6.45% | 6.45% |
| Axis | 6.40% | 7.05% |
Best Highest Fixed Deposit Interest Rates on Tax Saver FDs
I am providing you details of top 5 banks who are giving the highest interest rates on Tax Saver FDs. These are as below.
#1. Yes bank
Yes bank is the highest interest paying bank on its 5-years Tax saver FD. You can invest a maximum of Rs. 1.50 lakh and enjoy tax benefits.
Let’s check the FD interest rate on Yes bank tax saver FDs.
- For Individual – 7.25%
- For Senior citizen – 7.75%
#2. IDFC First Bank
IDFC First Bank also offers tax savings benefits on its 5-years Tax saver FD. Maximum investment is restricted to Rs. 1.50 lakh per year.
Let’s check the FD interest rate on IDFC bank tax saver FDs.
- For Individual – 7.25%
- For Senior citizen – 7.75%
#3. Lakshmi Vilas Bank
Lakshmi Vilas Bank also offers tax saver FD up to Rs. 1.50 lakh investment per year. LVB offers better interest rates to senior citizens.
Let’s check the FD interest rate on Lakshmi Vilas bank tax saver FDs.
- For Individual – 6.50%
- For Senior citizen – 7.10%
#4. ICICI bank
ICICI bank is paying a good return with tax savings benefits on its 5-years Tax saver FD. You can invest a maximum of Rs. 1.50 lakh.
Let’s check the FD interest rate on ICICI tax saver FDs.
- For Individual – 6.00%
- For Senior citizen – 6.50%
#5. Karur Vysya Bank
KVB is another bank in the bandwagon. Let’s check the FD interest rate on Karur Vysya bank tax saver FDs.
- For Individual – 6.45%
- For Senior citizen – 6.50%
Check out – Latest savings bank account interest rate
Fixed Deposit Interest Rate Comparison
You can compare FD interest rates of all the banks so that you can easily take an informed decision while selecting a bank for fixed deposit investment.
Here you would see, the private banks are paying better FD interest rates than public sector banks.
| Bank | Interest Rate Regular | Interest Rate Senior Citizen |
| State Bank of India | 3.50% – 5.70% | 4.00% – 6.20% |
| Yes bank | 5.00% – 7.50% | 5.50% – 8.00% |
| Bandhan bank | 3.50% – 6.75% | 4.25% – 7.50% |
| HDFC | 3.00% – 6.00% | 3.50% – 6.50% |
| ICICI | 3.50% – 6.00% | 4.00% – 6.00% |
| Axis | 3.50% – 6.50% | 3.50% – 7.00% |
| Indian bank | 4.95% – 6.45% | 4.95% – 6.45% |
| Karur Vysya | 3.75% – 6.30% | 4.95% – 6.80% |
| Indian Overseas | 4.50% – 6.20% | 5.25% – 6.85% |
| Federal Bank | 3.50% – 6.50% | 4.00% – 7.00% |
| Andhra Bank | 4.00% – 5.90% | 4.00% – 5.90% |
| PNB | 4.25 – 5.80% | 4.75% – 6.30% |
| Canara Bank | 4.25% – 5.80% | 4.25% – 6.30% |
| Bank of Baroda | 3.50% – 5.70% | 4.00% – 6.25% |
| Lakshmi Vilas Bank | 4.00% – 7.25% | 4.00% – 7.85% |
| IDFC First Bank | 4.00% – 7.50% | 4.50% – 8.00% |
| RBL Bank | 5.20% – 7.50% | 5.70% – 8.00% |
| Ujjivan Small Finance Bank | 5.50% – 8.10% | 6.00% – 8.60% |
| Au Small Finance Bank | 5.00% – 7.53% | 5.50% – 8.03% |
| Bajaj Finserv | 7.60% – 7.80% | 7.85% – 8.05% |
You would like to check – Latest PPF investment interest rates
Banks FD Interest Rates in India
Let’s discuss top 20 banks FD interest rates in India.
#1. Ujjivan Small Finance Bank FD Interest Rates 2020
The first position is acquired in this small finance bank who pays almost 1.5x FD interest rates than some commercial banks. You can enjoy high-interest rates with Ujjval Small Finance bank.
| Duration | Interest Rate Regular (%ge) | Interest Rate Senior Citizen (%ge) |
| 7 Days to 29 Days | 5.50 | 6.00 |
| 30 Days to 89 Days | 6.10 | 6.60 |
| 90 Days to 179 Days | 6.60 | 7.10 |
| 180 Days to 364 Days | 7.00 | 7.50 |
| 1 Year to 2 Years | 8.00 | 8.50 |
| 2 Years and 1 Day to 734 Days | 7.50 | 8.00 |
| 735 Days | 8.00 | 8.50 |
| 736 Days to 798 Days | 7.50 | 8.00 |
| 799 Days | 8.10 | 8.60 |
| 800 Days to 3 Years | 7.50 | 8.00 |
| 3 Years and 1 Day to 5 Years | 7.00 | 7.50 |
| 5 Years and 1 Day to 10 Years | 6.50 | 7.00 |
#2. Au Small Finance Bank FD Interest Rates 2020
Another small finance bank that offers high interest on FDs is Au Small Finance Bank.
| Duration | Interest Rate Regular (%ge) | Interest Rate Senior Citizen (%ge) |
| 7 Days to 1 Month 15 Days | 5.00% | 5.50% |
| 1 Month 16 Days to 3 Months | 5.75% | 6.25% |
| 3 Months 1 Day to 6 Months | 6.25% | 6.75% |
| 6 Months 1 Day to 12 Months | 6.75% | 7.25% |
| 12 Months 1 Day to 15 Months | 7.30% | 7.80% |
| 15 Months 1 Day to 18 Months | 7.25% | 7.75% |
| 18 Months 1 Day to 24 Months | 7.25% | 7.75% |
| 24 Months 1 Day to 36 Months | 7.53% | 8.03% |
| 36 Months 1 Day to 45 Months | 7.25% | 7.75% |
| 45 Months 1 Day to 60 Months | 7.25% | 7.75% |
| 60 Months 1 Day to 120 Months | 7.00% | 7.50% |
#3. IDFC First Bank FD Interest Rates 2020
IDFC First bank is among the higher interest paying banks in India. You can check the IDFC fixed deposit interest slabs in the table below.
| Duration | Interest Rate Regular (%ge) | Interest Rate Senior Citizen (%ge) |
| 7 Days to 14 Days | 4.00 | 4.50 |
| 15 Days to 29 Days | 5.00 | 5.50 |
| 30 Days to 45 Days | 6.25 | 6.75 |
| 46 Days to 90 Days | 6.50 | 6.75 |
| 91 Days to 180 Days | 6.75 | 7.00 |
| 181 days to less than 1 year | 7.00 | 7.50 |
| 1 year to 499 days | 7.25 | 7.75 |
| 500 days | 7.50 | 8.00 |
| 501 days to 2 years | 7.25 | 7.75 |
| 2 years onwards | 7.25 | 7.75 |
| Tax saver (5 years) | 7.25 | 7.75 |
#4. RBL Bank Bank FD Interest Rates 2020
You will enjoy high rates of FD interest while having a fixed deposit in RBL Bank. They pay as high as 7.60% interest for a 3 years term deposit.
| Duration | Interest Rate Regular (%ge) | Interest Rate Senior Citizen (%ge) |
| 7 days to 14 days | 5.20% | 5.70% |
| 15 days to 45 days | 5.45% | 5.95% |
| 46 days to 90 days | 5.95% | 6.45% |
| 91 days to less than 6 months | 6.15% | 6.65% |
| 6 months to less than 12 months | 6.65% | 7.15% |
| 12 months | 6.75% | 7.25% |
| 12 months 1 day to less than 15 months | 7.05% | 7.55% |
| 15 months to less than 18 months | 7.15% | 7.65% |
| 18 months | 7.50% | 8.00% |
| More than 18 months to less than 24 months | 7.40% | 7.90% |
| 24 months | 7.30% | 7.80% |
| More than 24 months to less then 36 months | 7.30% | 7.80% |
| 36 months | 7.60% | 8.10% |
| More than 36 months to 60 months | 7.50% | 8.00% |
| More than 60 months to 120 months | 7.25% | 7.75% |
Also read – National saving certificate interest rate
#5. Yes Bank FD Interest Rates 2020
Yes bank is one of the highest FD interest paying commercial banks in India. Yes bank pay as high as 7.50% return to an individual while 7.90% interest to a senior citizen.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 45 days | 5.00 | 5.50 |
| 46 days to 6 months | 6.25 | 6.75 |
| 6 months to less than 9 months | 6.85 | 7.35 |
| 9 months to less than 1 year | 7.15 | 7.65 |
| 1 year onwards | 7.25 | 7.75 |
12 months 10 days to 12 months 20 days | 7.40 | 7.90 |
18 months 8 days to 18 months 18 days | 7.40 | 7.90 |
| 2 years to less than 3 years | 7.50 | 8.00 |
| Tax saver | 7.25 | 7.75 |
#6. Lakshmi Vilas Bank FD Interest Rates 2020
Lakhsmi Vilas bank offers highest interest rate @ 7.25% for 500 days tenure.
| Duration | Interest Rate Regular (%ge) | Interest Rate Senior Citizen (%ge) |
| 7-14 Days | 4.00 | 4.00 |
| 15-30 Days | 4.25 | 4.25 |
| 31-45 Days | 4.75 | 4.75 |
| 46-90 Days | 5.25 | 5.25 |
| 91-120 Days | 5.75 | 6.25 |
| 121-150 Days | 6.00 | 6.50 |
| 151-180 Days | 6.25 | 6.75 |
| 181 – 364 Days | 6.50 | 7.00 |
| 365 Days to 499 Days | 6.75 | 7.35 |
| 500 Days | 7.25 | 7.85 |
| 501 Days to less than 3 Years | 6.75 | 7.35 |
| 3 Years to less than 5 Years | 6.50 | 7.10 |
| 5 Years to 10 Years | 6.50 | 7.10 |
#7. SBI FD Interest Rates 2020
The largest bank of India has reduced interest rate to 0.5% for an individual earlier the interest rate on a 1-year FD was 5.50% which is now reduced to 5%.
Similarly, senior citizens were earlier getting 6%, and will now get 5.50% interest on 1-year fixed deposit.
Let’s check their SBI interest rates on fixed deposits for the different time periods.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 45 days | 3.50 | 4.00 |
| 46 days to 179 days | 4.50 | 5.00 |
| 180 days to 210 days | 5.00 | 5.50 |
| 211 days to less than 1 year | 5.00 | 5.50 |
| 1 year to less than 2 year | 5.70 | 6.20 |
| 2 years to less than 3 years | 5.70 | 6.20 |
| 3 years to less than 5 years | 5.70 | 6.20 |
| 5 years and up to 10 years | 5.70 | 6.20 |
Check out – how banks calculate interest rate
#8. HDFC Bank FD Interest Rates 2020
HDFC bank offers flexibility to start a fixed deposit right from your home with the help of netbanking. HDFC bank also provides good returns on FD that varies on the duration of FD.
Let’s have a look at different HDFC fixed deposit interest rates.
| Duration | Interest Rate Regular (%ge) | Interest Rates For Senior Citizen (%ge) |
| 7 – 14 days | 3.00% | 3.50% |
| 15 – 29 days | 3.50% | 4.00% |
| 30 – 45 days | 4.25% | 4.75% |
| 46 – 60 days | 4.75% | 5.25% |
| 61 – 90 days | 4.75% | 5.25% |
| 91 days – 6 months | 4.75% | 5.25% |
| 6 mnths – 9 mnths | 5.25% | 5.75% |
| 9 mnths < 1 Year | 5.50% | 6.00% |
| 1 Year | 5.80% | 6.30% |
| 1 year – 2 years | 5.80% | 6.30% |
| 2 years – 3 years | 6.00% | 6.50% |
| 3 year – 5 years | 6.00% | 6.50% |
| 5 years – 10 years | 6.00% | 6.50% |
#9. ICICI Bank FD Interest Rates 2020
ICICI bank always stays ahead in adopting world-class technology. ICICI also offers better FD interest rates along with tax saver FDs to enjoy good returns along with tax savings.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 14 days | 3.50 | 4.00 |
| 15 days to 29 days | 3.75 | 4.25 |
| 30 days to 45 days | 4.25 | 4.75 |
| 46 days to 184 days | 4.75 | 5.25 |
| 185 days to 289 days | 5.25 | 5.75 |
| 290 days to less than 1 year | 5.50 | 6.00 |
| 1 year to less than 2 year | 5.80 | 6.30 |
| 2 years onwards | 6.00 | 6.50 |
| 5-years Tax saver FD (Max 1.50 lakh) | 6.00 | 6.50 |
#10. Axis Bank FD Interest Rates 2020
Axis bank offers fixed deposits with different time duration ranging from minimum 7 days up to 10 years. Axis bank also offers better FD interest rates than its counterparts.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 14 days | 3.50 | 3.50 |
| 15 days to 29 days | 4.25 | 4.25 |
| 30 days to 45 days | 4.90 | 4.90 |
| 46 days to 179 days | 5.40 | 5.40 |
| 180 days to 270 days | 5.80 | 6.05 |
| 271 days to 355 days | 6.05 | 6.30 |
| 356 days to less than 1 year | 6.40 | 6.65 |
| 1 year to less than 1.5 years | 6.40 | 7.05 |
| 1.5 years to less than 2.5 years | 6.50 | 7.15 |
| 2.5 years onwards | 6.50 | 7.00 |
#11. PNB FD Interest Rates 2020
Punjab National Bank has become the second largest public sector bank in India. PNB has a wider network with deep outreach in sub-urban and rural areas.
PNB offers amazing returns on FD interest rates for individuals as well as senior citizens.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 14 days | 4.25 | 4.75 |
| 15 days to 29 days | 4.25 | 4.75 |
| 30 days to 45 days | 4.25 | 4.75 |
| 46 days to 179 days | 5.00 | 5.25 |
| 180 days to 270 days | 5.50 | 6.00 |
| 271 days to 355 days | 5.60 | 6.10 |
| 333 days | 5.75 | 6.25 |
| 1 year onwards | 5.80 | 6.30 |
#12. Indian Bank FD Interest Rates 2020
Indian bank has become the 7th largest public sector bank in India after a merger with Allahabad bank. Indian bank offers the best FD interest rates for lower time period like 7 days, 15 days or 1 month.
But you also get one of the best FD interest rates if you increase the investment period.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 29 days | 4.95 | 4.95 |
| 30 days to 45 days | 5.20 | 5.20 |
| 46 days to 60 days | 5.45 | 5.45 |
| 61 days to 90 days | 5.95 | 5.95 |
| 91 days to 179 days | 6.20 | 6.20 |
| 180 days to less than 1 year | 6.25 | 6.25 |
| 1 year to less than 2 years | 6.45 | 6.45 |
| 2 years to less than 3 years | 6.35 | 6.35 |
| 3 years onwards | 6.25 | 6.25 |
| 333 days | 6.30 | 6.30 |
| Tax saver | 6.45 | 6.45 |
#13. Canara Bank FD Interest Rates 2020
Canar bank offers one of the lowest rates on the fixed deposits.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 45 days | 4.25 | 4.25 |
| 46 days to 180 days | 5.00 | 5.00 |
| 180 days to less than 1 year | 5.50 | 6.00 |
| 1 year to less than 3 years | 5.85 | 6.35 |
| 3 years onwards | 5.80 | 6.30 |
| Tax saver | 5.80 | 6.30 |
#14. Bank of Baroda FD Interest Rates 2020
You can check out different interest rates on fixed deposits that Bank of Baroda offers to their customers.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 45 days | 3.50 | 4.00 |
| 46 days to 180 days | 4.50 | 5.00 |
| 180 days to less than 1 year | 5.00 | 5.50 |
| 1 year onwards | 5.70 | 6.25 |
| Tax saver | 5.70 | 6.25 |
#15. Karur Vysya Bank FD Interest Rates 2020
Karur Vysya Bank is more beneficial to senior citizens for better returns on fixed deposits. Here’s the comparison of KVB fixed deposit interest rates.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 29 days | 3.75 | 4.95 |
| 30 days to 45 days | 4.00 | 5.20 |
| 46 days to 90 days | 4.25 | 5.45 |
| 91 days to 179 days | 4.50 | 6.20 |
| 180 days to less than 270 days | 5.00 | |
| 271 days to less than 1 year | 5.25 | 6.25 |
| 1 year to less than 2 years | 5.50 | 6.75 |
| 2 years to less than 3 years | 6.35 | 6.80 |
| 3 years onwards | 6.25 | 6.80 |
| 333 days | 6.30 | – |
| Tax saver | 6.45 | 6.50 |
#16. Indian Overseas Bank FD Interest Rates 2020
IOB offers interest rates in 3 categories –
- Individual person below 60 years age
- Senior citizen of 60 years age but below 80 years age
- Super senior citizen above 80 years age
IOB provides additional benefits to the senior and super senior citizens.
| Duration | Interest Rates Regular (%ge) | Interest Rates for Senior Citizens (Above 60 years, below 80 years) (%ge) | Interest Rates for Senior Citizens (Above 80 years) (%ge) |
| 7-45 days | 4.50 | 5.00 | 5.25 |
| 46-90 days | 4.60 | 5.10 | 5.35 |
| 91-120 days | 5.25 | 5.75 | 6.00 |
| 121-179 days | 5.50 | 6.00 | 6.25 |
| 180-269 days | 5.75 | 6.25 | 6.50 |
| 270 days to < 2 years(except 444 days) | 6.10 | 6.60 | 6.85 |
| 444 days | 6.20 | 6.70 | 6.95 |
| 2 yrs to < 3 yrs | 6.10 | 6.60 | 6.85 |
| 3 yrs and above | 6.10 | 6.60 | 6.85 |
#17. Bandhan Bank FD Interest Rates 2020
Bandhan bank is among those a few banks that offer above 6% FD interest to an individual and above 7% FD interest to a senior citizen.
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 14 days | 3.50 | 4.25 |
| 15 days to to less than 3 months | 4.00 | 4.75 |
| 3 months to less than 6 months | 4.50 | 5.25 |
| 6 months to less than 1 year | 5.40 | 6.15 |
| 1 year to less than 18 months | 6.75 | 7.50 |
| 18 months to less than 2 years | 6.75 | 7.50 |
| 2 years to less than 3 years | 6.75 | 7.50 |
| 3 years to less than 5 years | 6.60 | 7.35 |
| 5 years onwards | 6.50 | 7.25 |
#18. IDBI Bank FD Interest Rates 2020
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7-14 days | 3.10 | 3.60 |
| 15-30 days | 4.00 | 4.50 |
| 31-45 days | 4.25 | 4.75 |
| 46- 60 days | 5.00 | 5.50 |
| 61-90 days | 5.00 | 5.50 |
| 91-6 months | 5.00 | 5.50 |
| 6 months 1 day to 270 days | 5.25 | 5.75 |
| 271 days upto< 1 year | 5.50 | 6.00 |
| 1 year | 5.85 | 6.35 |
| > 1 year – 2 years | 5.75 | 6.25 |
| >2 years to < 3 years | 5.80 | 6.30 |
| 3 years to < 5years | 5.75 | 6.25 |
| 5 years | 5.90 | 6.40 |
| > 5 years – 7 years | 5.80 | 6.30 |
| >7 years – 10 years | 5.80 | 6.30 |
| >10 years – 20 years* | 5.50 | 6.00 |
| Tax Saver 5 years | 5.90 | 6.40 |
#19. Federal Bank FD Interest Rates 2020
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7 days to 14 days | 3.50 | 4.00 |
| 15 days to 29 days | 4.50 | 5.00 |
| 30 days to 60 days | 5.00 | 5.50 |
| 61 days to 90 days | 5.50 | 6.00 |
| 91 days to 180 days | 5.75 | 6.25 |
| 181 days to less than 1 year | 6.00 | 6.50 |
| 1 year | 6.30 | 6.80 |
| Above 1 year to less than 20 months | 6.40 | 6.90 |
| 20 months | 6.50 | 7.00 |
| Above 20 months | 6.40 | 6.90 |
#20. Andhra Bank FD Interest Rates 2020
| Duration | Interest Rate Regular (%ge) | Interest Rates for Senior Citizens (%ge) |
| 7-14 Days | 4.00 % | 4.00 % |
| 15-30 Days | 4.00 % | 4.00 % |
| 31-45 Days | 4.25 % | 4.25 % |
| 46-90 Days | 4.50 % | 4.50 % |
| 91-120 Days | 5.00 % | 5.00 % |
| 121-180 Days | 5.25 % | 5.25 % |
| 181 Days to < 1 Year | 5.50 % | 5.50 % |
| 1 Year | 5.75 % | 5.75 % |
| >1Year to <444 Days | 5.75 % | 5.75 % |
| 444 Days | 5.85 % | 5.85 % |
| >444 Days to <555 Days | 5.75 % | 5.75 % |
| 555 Days | 5.90 % | 5.90 % |
| >555 Days to 3 Years | 5.75 % | 5.75 % |
| >3 Years to 5 Years | 5.80 % | 5.80 % |
| >5 Years to 10 Years | 5.80 % | 5.80 % |
Post Office FD Interest Rates 2020
Indian post office offers better FD interest rates than some public sector banks. You can start a fixed deposit account in your nearest post office with a minimum amount of Rs. 1,000.
Here’s the slab of fixed deposit interest rates as per the duration of investment.
| Duration | Interest Rates |
| 1yr.A/c | 5.5% |
| 2yr.A/c | 5.5% |
| 3yr.A/c | 5.5% |
| 5yr.A/c | 6.7 % |
Post office pays a fixed 7.4% interest rate to senior citizens with a lock-in period of 5 years. Senior citizen also get tax exempt up to Rs 50,000 under Section 80TTB on the interest earned.
FD Interest Rates Calculator
Here’s the formula for calculating FD interest rate.
M=P(1+r/n)^n*t
Where
M – maturity amount
P – principal amount
r – rate of interest
t – number of years
n – compounded interest frequency
Let’s understand this with an example.
You have Rs. 1,00,000 in a Fixed Deposit for a time period of 1 year at an interest rate of 8%, which is compounded annually.
Here’s the calculation of 1 year FD where n =4 (interest compounded quarterly)
M = 100000*{[1+(0.08/4)]^(4*1)}
M = 100000* {(1.02)^4}
M = 100000* 1.08243
M = 108243
Hence, interest earned in 1 year would be – Rs. 8,243
Final Words
If you want to earn higher returns then you should invest in other high returns investment options like mutual funds or stock investment. As the fixed deposit interest rate is declining.
Invest only in FD if you are saving for short term and want to save your capital from short term market fluctuations.
If you have any questions regarding fixed deposits, do let me know in the comments.
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