Introduction
Fixed Deposits (FDs) have long been one of the most preferred investment options in India. They offer guaranteed returns, low risk, and flexibility in tenure. But with inflation rising, people are looking for the highest FD interest rates to maximize their savings. In this article, we’ll explore which banks provide the best FD interest rates, the details of SBI’s tax-saving FD, and the latest interest rates for 2024.
Which Bank Gives 9.5% Interest on FD?
Is 9.5% FD Interest Rate Possible?
A 9.5% interest rate on FD is exceptionally high. Most major banks, including SBI, HDFC, and ICICI, offer interest rates between 6-8% on fixed deposits. However, some small finance banks and NBFCs occasionally provide promotional rates closer to 9%.
Banks Offering High FD Interest Rates
Some small finance banks, cooperative banks, and rural banks offer higher interest rates than commercial banks. Currently, a few banks providing high FD rates (above 8%) include:
- Jana Small Finance Bank
- Ujjivan Small Finance Bank
- AU Small Finance Bank
- Suryoday Small Finance Bank
Special FD Schemes with High Returns
Occasionally, banks introduce special FD schemes for senior citizens, women, or specific tenures, offering rates up to 9%.
What is SBI Tax Saving FD?
Overview of SBI Tax Saving FD
The SBI Tax Saving FD is a special fixed deposit scheme designed for taxpayers looking to save under Section 80C of the Income Tax Act.
Eligibility and Features
- Available for Indian residents
- Lock-in period of 5 years
- Investment amount: Minimum ₹1,000 and Maximum ₹1.5 lakh per year
- Premature withdrawal is not allowed
Interest Rates for SBI Tax Saving FD
The current SBI Tax Saving FD interest rate is 6.50% for the general public and 7.25% for senior citizens.
Tax Benefits
- The amount invested is deductible up to ₹1.5 lakh under Section 80C.
- However, interest earned is taxable as per income tax slabs.
How to Apply?
- Online: Through SBI’s net banking or YONO app
- Offline: By visiting an SBI branch
What is the Interest Rate Today?
Factors Affecting FD Interest Rates
FD rates vary based on:
- RBI’s monetary policy
- Inflation rates
- Bank liquidity
- Economic conditions
Comparison of FD Interest Rates (February 2024)
| Bank Name | Regular FD Rate | Senior Citizen FD Rate |
|---|---|---|
| SBI | 6.50% | 7.25% |
| HDFC Bank | 7.00% | 7.75% |
| ICICI Bank | 6.90% | 7.50% |
| Kotak Mahindra Bank | 7.25% | 7.90% |
| Bajaj Finance (NBFC) | 8.35% | 8.75% |
Benefits of Investing in an FD
- Safe and secure investment
- Fixed and predictable returns
- Tax-saving options available
- Senior citizen benefits
- Can be used as collateral for loans
How to Choose the Best FD for You?
- Compare interest rates across banks
- Look for quarterly or monthly compounding interest
- Check for premature withdrawal policies
- Consider tax-saving options if needed
How to Open an FD Account?
- Online: Log in to your bank’s net banking or mobile app
- Offline: Visit a branch with KYC documents
- Submit required documents like Aadhaar, PAN, and address proof
- Choose tenure and deposit amount
- Receive FD receipt and start earning interest!
Conclusion
Fixed Deposits remain one of the best investment options for risk-averse individuals. While a 9.5% FD interest rate is rare, some small finance banks offer attractive rates. SBI’s Tax Saving FD is an excellent choice for tax benefits, but it comes with a lock-in period. Always compare FD rates before investing to ensure the best returns.
FAQs
- Which bank currently offers the highest FD interest rate?
- As of 2024, some small finance banks offer rates above 8%.
- Can I withdraw my SBI Tax Saving FD before maturity?
- No, SBI Tax Saving FD has a mandatory 5-year lock-in period.
- How often do banks change FD interest rates?
- Banks revise FD rates based on RBI policies and market conditions.
- Is investing in an FD better than mutual funds?
- FDs offer guaranteed returns, while mutual funds carry market risks.
- Can NRIs open an FD in India?
- Yes, NRIs can invest in NRE and NRO FDs in India.