Highest Interest Rate on Bank Fixed Deposits (FD) – May 2016

Highest Interest Rate on Bank Fixed Deposits - May 2016

Highest Interest Rate on Bank Fixed Deposits – May 2016

The post lists down the rate of interest on Bank fixed deposits as of May 1, 2016.

You might want to bookmark this page as the FD interest rates would be updated every month. Would help you in better decision making.

Fixed Deposit Highlights:

  • Most banks offer FDs for tenure of 7 Days to 10 Years.
  • Some banks like The Ratnakar Bank, IDBI Bank and State Bank of Patiala do offer fixed deposits up to 20 years too.
  • For very short Term Deposits the interest rate is similar to that of Savings Account and so you should not worry about FD. Also Interest up to Rs 10,000 in Saving Account is Tax free.
  • Most banks compound interest quarterly
  • Banks offer Loan/Overdraft against the amount available in Fixed Deposit. The interest is generally 0.5% to 1% more than that offered to FD.
  • TDS (Tax deduction at source) at the rate of 10% is deducted, if the interest income is more than Rs 10,000 in financial year per bank
  • There might be penalty for pre-mature withdrawal of Fixed Deposits

Also Read: Highest interest rate on savings account in India?

Fixed Deposit Interest Rates:

The highest interest rate is offered by The Ratnakar Bank at 8.75% for 24 to 36 months Fixed Deposit.

Also IDFC Bank and Bandhan Bank are the newest banks to open and are offering higher rate of interest across deposit tenures.

For comparing the best interest rates on fixed deposits over different duration of investment, we have it divided into following 4 slabs:

  • FD for Less than 1 Year
  • FD for 1 to 2 years
  • FD for 2 to 5 Years
  • FD for More than 5 years

We show the highest interest rates on fixed deposits for the above duration buckets. We have also compared the best interest rates on offer by that being offered by State Bank of India (SBI), ICICI Bank and Post Offices.

Click for Best Tax Saving FDs u/s 80C

Interest Rate for FD of Less than 1 Year:

The highest interest rate is offered by Bandhan Bank (6 Months – Less than 1 Years), The Ratnakar Bank (241 days to 364 days) and IDFC Bank (271 – 365 days) at 8.00%.

Bank Duration Interest Rate
Bandhan Bank 6 Months – Less than 1 Years 8.00%
IDFC Bank 271 – 365 days 8.00%
The Ratnakar Bank 241 days to 364 days 8.00%
Karur Vysya Bank 91 Days to 180 Days 7.90%
Canara Bank 270 days to less than 1 year 7.75%
DCB Bank 6 months to less than 12 months 7.75%
IDFC Bank 181 – 270 days 7.75%
J&K Bank 271 days to less than 1 year 7.75%
City Union Bank 181 days to 364 days 7.65%
Karnataka Bank 121 days to 180 days 7.65%
Lakshmi Vilas Bank 271 – 364 days 7.60%
Andhra Bank 9 months to < 1 year 7.50%
Canara Bank 270 days to less than 1 year 7.50%
Indus Ind Bank 270 days or below 1 year 7.50%
J&K Bank 181 days to 270 days 7.50%
Kotak Mahindra Bank 271 Days to less than 5 years 7.50%
Lakshmi Vilas Bank 181 – 270 days 7.50%
Syndicate Bank 270 to 1 Year 7.50%
Tamilnad Mercantile Bank Ltd 180 Days 7.50%
The Ratnakar Bank 181 days to 240 days 7.50%
State Bank of India Government Bank Benchmark 5.00% – 7.00%
ICICI Bank Private Bank Benchmark 4.00% – 7.40%

 

Also Read: 21 Hidden Charges in Saving Bank Account

Interest Rate for Fixed Deposit of 1 – 2 Years:

The highest interest rate is offered by The Ratnakar Bank (12 months to less than 24 months), Bandhan Bank and IDFC Bank (366 – 400 days) at 8.25%.

Bank Duration Interest Rate
Bandhan Bank 1 year to less than 2 years 8.25%
IDFC Bank 366 – 400 days 8.25%
The Ratnakar Bank 12 months to less than 24 months 8.25%
DCB Bank 18 months to less than 24 months 8.05%
DCB Bank 13 months to less than 18 months 8.00%
IDFC Bank 271 – 365 days 8.00%
IDFC Bank 401 – 540 days 8.00%
J&K Bank 1 year to less than 5 years 8.00%
Tamilnad Mercantile Bank Ltd 400 days 7.95%
DCB Bank 12 months to less than 13 months 7.90%
Lakshmi Vilas Bank 18 Months to less than 5 years 7.90%
Tamilnad Mercantile Bank Ltd 555 days 7.85%
Lakshmi Vilas Bank 1 year to Less than 18 months 7.80%
Lakshmi Vilas Bank 1 year to less than 18 months 7.80%
Tamilnad Mercantile Bank Ltd 20 Months 20 Days 7.80%
Tamilnad Mercantile Bank Ltd 1 Year to 554 Days 7.80%
City Union Bank 1 year & upto 5 years 7.75%
IDBI Bank 1yrs to < 2yrs 7.75%
IDFC Bank 541 – 731 days 7.75%
Indus Ind Bank 1 year to below 1 years 2 months 7.75%
Karur Vysya Bank 1 year to less than 2 years 7.75%
Tamilnad Mercantile Bank Ltd 556 Days to less than 5 years 7.75%
Yes Bank 12 Months 10 Days to 12 Months 20 Days 7.75%
Yes Bank 18 Months 8 Days to 18 Months 18 Days 7.75%
South Indian Bank 15 Months 7.70%
UCO Bank 1 Year 7.70%
Union Bank of India 1 Year 7.65%
Bank of Maharashtra 444Days/Mahanidhi 7.61%
Bank of Maharashtra 1 year to 2 years 7.60%
Central Bank of India 1 yr to less than 2 yrs 7.60%
Dena Bank 1 year to less than 2 years 7.60%
South Indian Bank 1 year to less than 3 years 7.60%
State Bank of Mysore 1 year to less than 2 years 7.60%
State Bank of Patiala 1 year to 555 days 7.57%
Canara Bank Above 1 year to less than 2 years 7.55%
Punjab and Sind Bank 1 year to below 2 years 7.55%
Union Bank of India >1 Year – 3 Year 7.55%
State Bank of India Government Bank Benchmark 7.25% – 7.50%
ICICI Bank Private Bank Benchmark 7.40% – 7.50%
Post Office FD (1 year) Post Office 7.10%
Post Office FD (2 years) Post Office 7.20%

Click for Best Interest Rate on Recurring Deposits

Interest Rate for Fixed Deposit of 2 – 5 Years

The highest interest rate is offered by The Ratnakar Bank (24 months to less than 36 months) at 8.75%.

Bank Description Interest Rate
The Ratnakar Bank 24 months to less than 36 months 8.75%
Bandhan Bank 2 years to less than 3 years 8.25%
DCB Bank 24 months to 60 months 8.10%
Bandhan Bank 3 years to less than 5 years 8.00%
J&K Bank 1 year to less than 5 years 8.00%
Lakshmi Vilas Bank 18 Months to less than 5 years 7.90%
Central Bank of India 777 Days 7.80%
City Union Bank 1 year & upto 5 years 7.75%
Indus Ind Bank 2 years 6 months to below 2 years 9 months 7.75%
Karur Vysya Bank 2 years and above 7.75%
Tamilnad Mercantile Bank Ltd 556 Days to less than 5 years 7.75%
Yes Bank 24 Months 12 Days to 24 Months 24 Days 7.75%
Central Bank of India 777 Days 7.65%
Bank of Maharashtra 666 Days/ Maha Labh 7.62%
Central Bank of India 2 yr to less than 3 years 7.60%
South Indian Bank 1 year to less than 3 years 7.60%
Canara Bank 2 years & above to less than 5 years 7.55%
Union Bank of India >1 Year – 3 Year 7.55%
Andhra Bank Above 2 years to 5 years 7.50%
Bank of Maharashtra 2 years to less than 3 years 7.50%
Corporation Bank 1 year & above 7.50%
State Bank of India Government Bank Benchmark 7.00% – 7.50%
ICICI Bank Private Bank Benchmark 7.50%
Post Office FD (2 years) Post Office 7.20%
Post Office FD (3 years) Post Office 7.40%
Post Office FD (5 years) Post Office 7.90%

 

Also Read: Where to Park Money for Very Short Term [less than 6 Months]?

Interest Rate for FD of More than 5 Years

The highest interest rate is offered by The Ratnakar Bank (36 months to less than 120 months) at 8.50%.

Most banks offer fixed deposit up to 10 years only. However banks like Ratnakar Bank, IDBI Bank and State Bank of Patiala do offer fixed deposits up to 20 years too.

Bank Duration Interest Rate
The Ratnakar Bank 36 months to less than 120 months 8.50%
The Ratnakar Bank 120 months to 240 months 8.25%
DCB Bank More than 60 months to 120 months 8.00%
Lakshmi Vilas Bank 5 years and above 7.80%
Tamilnad Mercantile Bank Ltd 5 Years to 10 Years 7.80%
Bandhan Bank 5 Years to 10 years 7.75%
J&K Bank 5 years to 10 years 7.75%
Karur Vysya Bank 2 years and above 7.75%
Andhra Bank Above 5 years to 10 years 7.50%
City Union Bank Above 5 years & upto 10 years 7.50%
Corporation Bank 1 year & above 7.50%
IDBI Bank Above 5 years & upto 20 years 7.50%
IDFC Bank Above 5 years & upto 10 years 7.50%
Karnataka Bank Above 2 Years to 10 years 7.50%
South Indian Bank Above 3 years up to and incl.10 years 7.50%
State Bank of Hyderabad Above 5 yrs and upto 10 yrs 7.50%
State Bank of Mysore Above 5 yrs and upto 10 yrs 7.50%
Yes Bank 1 Year to <= 10 years 7.50%
State Bank of India Government Bank Benchmark 7.00%
ICICI Bank Private Bank Benchmark 7.25%

Source: Bank Websites                                          Last Updated: May 1, 2016

Disclaimer: The Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD.

Also Read: 13 Investments to Generate Regular Income

Helpful Posts on FD:

It would be helpful for you to look at following posts before you choose your fixed deposits:

  1. How to increase bank deposit insurance through Joint accounts?
  2. How to fill Form 15G/H to avoid TDS deduction?
  3. How Safe is Your Fixed Deposit in Bank?
  4. How are you loose Money in Fixed Deposits?

98 thoughts on “Highest Interest Rate on Bank Fixed Deposits (FD) – May 2016

  1. Hi Amit,

    I have an NRI account with SBI. I plan on transfering to FD at SBI for 1 to 2 years for amount of Rs. 20 lacs. How much monthly interest would it yeild approximately? Please advise best option and highest yield.

    • If you invest for 2 years in SBI you would get 7.25% interest – which means around Rs 3 lakhs interest in 2 years. So approximately Rs 12,500 per month. You can choose the best yield according to tables published in the post.

  2. RAHUL SINGH says:

    there is any incometax probem to deposit less the 1 lakh in savings account

    • There is no issue on depositing above amount in savings account. The bank might ask for PAN card. Also if you deposit Rs 10 lakh or more in cash in a year it would be reported to the income tax department.

  3. chakaravarthy says:

    Hello Amit,

    I have interested to invest 5 lakhs in MIS plan ,one of my friend recommended Nbfc like DHFL FIXED DEPOSITS , that are offering High interest rates , can I go for that .

  4. Hi Amit

    I need an advice from you. I have Rs 25 lacs which I want to invest in FD. Is there any problem if I make FD of entire amount in one go. Or should I break it in parts to avoid any income tax query or bank query related to source of funds.

    • If you are not depositing the amount in cash you should not be worried. If you deposit more than Rs 10 lakh in a bank in a financial year, it would be reported to Income tax.

  5. Rakesh Sharma says:

    Dear Amit Ji
    Which Bank gives Highest Rate of Interest on MIS (Monthly Income Scheme),For Example if i Invested Rs.5 Lakh for 5 Years then How much interest amount i should except to get monthly.

    • The interest rates for MIS are slightly lesser to the one offered for regular Fixed deposits as the interest payout is monthly while in regular FD the compounding is quarterly. So the banks offering highest interest rate on regular fixed deposit would be the one offering higher interest rate on their MIS.

  6. Hi Amit !! Thanks for all those explanations. Answers in the comment blog is also very helpful. Thanks again for the useful tips.

    I have some questions

    1) I am owning savings account in HDFC bank, I see that in your blog if we own amount more than a limit prescribed by the bank in the savings account it will be taxable (‘Interest up to Rs 10,000 in Saving Account is Tax free’).

    Please correct me if am wrong.

    Could you please let me know the savings account money limit for HDFC bank?

    2) I am planning to go for FD in HDFC bank(Approx. 1Lakh) and Duration would be 6 months are lesser.

    Could you please help me to understand which is a better period to chose(7-14 days or 15-29 days or like wise) for a good interest rate?

    Looking forward for your response.

    Thanks
    Arun B

    • There is no limit for the money you can keep in savings account for any bank. Also the Rs 10,000 tax free is after adding interest on all savings account for all banks.

      For short term Fixed deposits, the interest usually increases as you increase your tenure. In your case HDFC bank offers 3.5% for 7 to 15 days deposit which is less than saving account interest of 4%. So never invest for this duration.

      The interest offered is 7% for 90 days to 6 months and 7.25% for 6 months 1 day, so choose the period which offers higher rate if you that flexibility with your money.

  7. Hi Amit,
    I am from Kingdom of Bahrain , and i would like to India just i need your advice which Bank do you
    recommend for Fixed deposit for a period of five years for an amount of USD 200,000.00
    Awaiting your kind reply.

    • If you want the safest option you should go for big Government banks like SBI or PNB. You can also look at big private banks like ICICI, HDFC and Axis as these are too big to fail. Other than this you might want to put small amounts in small private banks like RBL which offer high interest rates.

      • Hi Dear Amit,

        Thanks a lot for your reply, what are the current fixed Deposit for the said Banks , and is there
        any deduction or restrictions as i am a foreigner from kingdom of Bahrain as you know , and how i can open a fixed deposit account as i am in Bahrain , i mean the way to approach them.

        Many thanks in advance for your kind assistance.

        • You’ll need to approach any Indian bank branches in your city and take it from there. I am personally not aware of the process for opening bank FDs in Indian banks by foreigners.

  8. Dear Amit
    Could you please give me some advice on where my mother (she is a senior citizen) could fix 26 Lakhs for a short term period of three or four months.
    Thanks in advance.

    • Yes senior citizens would get around 7% to 8% on Fixed Deposit of 3 to 4 months. For e.g. ICICI bank is offering 7.5% – which is good. You might want to explore other banks or make deposit with bank your mother already have account with for easy transaction.

  9. Hi Amit,

    If you could help me with the baclground of this bank as it is headquatered in the western part of india. Is it a viable option for a huge saving because their interest rates are too high compared to competitive banks.

  10. Ramesh Chandra Aggarwal says:

    Dear Amit.
    Can you just give me an idea particularly from the safety point of view with regard to my investment plan of Rs. 15.00 to 20.00 lakhs in Ratnakar Bank Ltd for a period of 5 years,where they are paying 8.75 % + 0.5% on Sr citizen.It will be on half yearly payment of interest plan.Or do you have any other advantageous scheme, whereby I can get substantial income of interest as I am a retired person. Your guidance may help me a lot in right perspective. This investment I am already heaving in PNB housing Finance, which is getting matured.

  11. hi, i want to invest Rs.5 lac in fixed deposit for my daughter future for after 17 years we take that and use her purpose .high rate of interest is post office only for 5 years .one is if there is safe 5 years once renewel or continuously for 17 years . if there is any bank in india for 17 years fd continuously without renewel . pls tell and my opnion is right or wrong pls tell.

    • Most banks offer fixed deposit up to 10 years. However few banks like RBL offers deposit tenure up to 20 years.

      Personally for such long tenure I would advice equity mutual funds or balanced mutual funds. In most cases they give higher returns and are more tax efficient to fixed deposits.

  12. Sir,I am having 2.50 lacs(R D maturity). Pls furnish the best investment, like fixed deposit in BANK or post office.

    • It depends on how, why and when you want to use the money. If the usage is after more than 10 years go for equity mutual fund, if its for 5 to 10 years go for balanced mutual fund, if its for less than that you can invest in fixed deposits, short term debt mutual funds etc. The choice would also depend on your tax bracket. If you are on the lower tax bracket go for FD else debt mutual funds are better choice.

  13. LAKSHMIKANTH V R says:

    SIR I wanted to invest FIVE lacs in TN power finance corp at 9.25% for 36 months is it worth or suggest me high yielding monthly interest scheme

  14. Tajinderpal Atwal says:

    Hello Amit,
    I’m currently a resident in the U.S. and I want to invest in India with an amount of 2 lakhs. I was born there and plan on retiring there. What would you recommend to me for a good investment?

    • It would be difficult to recommend anything without knowing the details like your risk taking ability, liabilities, assets and many other things. I would recommend to consult a financial planner for detailed discussion.

  15. Hello Amit! its nice reading all Questions and suggestions. its helpful. Thank you.
    my query is,
    1) i want to invest 4-5k/p.m. and do not want to be abide every month i.e.. i will deposit as and when and how much i can, so in post office how many F.D. can a single person open?
    2) what do these “1lakh is insured means” i mean every month 1lakh or every year 1 lakh total 1 lakh?

    • Thanks for appreciation 🙂

      1. There is no limit on number of Fixed Deposit that you can open at Post Office.
      2. The 1 lakh insurance means all the money that you have in one bank including the interest payable if any.

    • Biswajit Nayak says:

      Why to keep you money into fixed deposits as interest is taxable. You should opt for SIP.

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