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Best Bank for Fixed Deposit in India

Creating a portfolio with fruitful investment sources is one of the common ways to secure your future and achieve long-term goals. How you utilise your earnings can have a major impact on your future expenses. It is always advised to start investing as soon as you start earning to get the benefits of compounding. Investing helps you to manage your expenses by creating discipline in your spending habits.

A fixed deposit is one of the indicators that strikes our mind while considering investing or savings options. An FD is a prominent tool that can be used for wealth creation. However, it is extremely important to choose the appropriate bank for opening your fixed deposit account that meets your expectations. If you are puzzled about picking the bank to open your FD account, this guide will help you select the best bank for fixed deposits in India.

What is a fixed deposit?

A fixed deposit is one of the most common investment schemes introduced by banks and non-banking financial companies for the interests of their customers. In this scheme, a customer can invest a fixed amount of money for a fixed period of time. In return, he gets a fixed rate of interest for the period he has invested his money. On the maturity of this fixed deposit, a customer receives the lump sum amount along with the amount of interest.

All the banks offer different rates of interest for FD accounts. Let us move further and see which is the best bank for fixed deposits in India.

Fixed Deposit Interest Rates

The rate of interest for a fixed deposit account depends on various factors. The fixed deposit rate of interest is different for general citizens and senior citizens. As per our study and records, Axis Bank can be referred to as the best bank to choose when opening an FD account. The Axis Bank fixed deposit rates range from 2.50% to 5.75%, depending on the tenure of the RD.

Axis Bank Fixed Deposit

You can grow your savings with Axis Bank’s fixed deposit by opening an FD account with a minimum amount of ₹5000. Axis Bank has also come up with online account opening services through which you can easily open your FD account from any place. It also offers an automatic roll-out facility that credits the interest amount directly to the bank account of the customer.

Benefits of Axis Bank Fixed Deposit Account

  • You can easily open your FD account in Axis Bank with a minimum investment amount of ₹5000 if using online services. If booked via branch, this investment amount changes to ₹10000.
  • You can open your FD account with a short tenure of just 7 days.
  • You can earn more interest here since the interest is reinvested along with the principal amount after every quarter.
  • You can also enjoy the benefits of transferring funds from your savings account to the fixed deposit account.
  • The bank offers various schemes such as quarterly compounding, reinvestment of interest amount, monthly payout of interest, and quarterly payout of interest.

Factors Affecting the Fixed Deposit Interest Rates

There are various factors on which the interest rate of a fixed deposit depends. These factors are –

  1. Tenure of the Investment – The rate of interest of a fixed deposit is lower in the case of lower tenure and higher returns for high higher tenure. It is always advised to lock in your investment amount for the highest possible tenure to earn higher returns if you do not wish to withdraw your amount in the near future.
  2. Age of the Depositor – The fixed deposit rate of interest is lower for the general citizens (less than 60 years of age) and higher for the senior citizens (above 60 years).
  3. The Amount of Deposit – The bank offers a higher rate of interest for the higher amounts of investment.

Tax Implications on the Fixed Deposits

Certain tax implications that can be seen in opening a fixed deposit account are as follows –

  1. The investment amount of up to ₹1,50,000 in a tax saver FD scheme is exempt from tax as per the provisions of section 80C.
  2. The entire interest that you earn through a fixed deposit account is added to your total income and taxed as per the tax bracket you fall in.
  3. The tax is deducted at source at 10% if PAN details are furnished. In the absence of PAN details, the TDS of 20% is deducted.
  4. No TDS will be charged on the interest of your FD if the total interest earned is less than ₹40,000. In the case of senior citizens, this limit is increased to ₹50,000.
  5. If you are not eligible to pay any income tax due to falling in the tax bracket of total income below ₹2.5 lakhs, then you can avoid paying TDS by furnishing the required details in Form 15G to the bank. On the other hand, senior citizens can furnish the same details in Form 15H if their total income falls below the taxable limit.

With Kuvera, you can easily compare the fixed deposit options offered by different banks. Follow the steps given below to enjoy a seamless experience at Kuvera:

Step 1: Download the Kuvera app or visit our website and sign up.

Step 2: Complete your KYC with PAN, Aadhaar, and In-person verification through video. It is mandatory to complete KYC compliance under the Prevention of Money Laundering Act, 2002, and the rules framed there under, read with the SEBI Master Circular on Anti Money Laundering (AML) Standards/ Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries.

Step 2: Select the ‘Invest' option from "Home".

Step 3: Select ‘Fixed Deposits’.

Step 4: You will see a list of multiple fixed Deposit options on Kuvera, sorted by tenure, bank, NBFC etc. Click on any FD to check its tenure, interest rate, and minimum deposit required. To be sure, check the lock-in period of the fixed deposit.

Step 5: Select the fixed deposit you want to invest in, and tap on “Start FD”.

Step 6: You will be asked to provide your primary bank account details - IFSC code, account number and account type.

Final Thoughts

Banks and NBFCs offer multiple benefits for opening a fixed deposit account. The customers can enjoy the benefits of high-interest rates, tax exemptions, flexible tenures, and so on. A fixed deposit is a secure and convenient option to lock in your amount at a trusted place to have a better future. You can easily redeem your fixed deposit before its maturity in case of any emergency. It must be noted that the rate of interest paid by the banks on fixed deposits can be changed without any prior notice.

Frequently Asked Questions

1. What are the benefits of a fixed deposit account?

The benefits of a fixed deposit account are –

  • Higher interest rates

  • Convenient and hassle-free scheme to open

  • Invest your amount for the shortest tenure of 7 days

  • Enjoy the benefits of compounding

2. What is the maximum tenure for which I can open the fixed deposits account in Axis Bank?

The maximum tenure for investing your amount in FD in Axis Bank is 5 years.

3. What is the minimum amount of investment I can make in Axis Bank FD through online mode?

Through online mode, the minimum amount you can invest in Axis Bank FD is ₹5000.

4. What are the documents required to open an FD account?

  • Original and a xerox of your valid ID proof

  • Original and a xerox of your PAN card

  • Two passport size photographs

  • Other documents as may be necessary

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