Fixed Deposits
Predictable, fixed returns on your savings.
Overview
Fixed deposits get treated as the default, no-thought-required place to park savings — and for money you genuinely won't need soon, that instinct isn't wrong. But 'safe' isn't the same as 'optimal.' Rates vary meaningfully between banks and NBFCs, and locking everything into a single large FD with one maturity date can leave you needing to break it early and lose interest, right when the money would have been most useful.
We help you compare FD rates across banks and NBFCs on the terms that actually matter — not just the headline rate, but premature withdrawal penalties and, for NBFCs, credit rating — and structure deposits, including laddering across staggered maturities, so your money stays genuinely accessible without giving up return.
What We Help With
- Bank and corporate/NBFC fixed deposits
- Comparison of interest rates across issuers
- FD laddering for better liquidity management
- Senior citizen FD schemes with higher rates
Types of Fixed Deposits
Bank Fixed Deposits
Insured up to ₹5 lakh per depositor by DICGC, making them the safest FD option, typically at somewhat lower rates than NBFCs.
NBFC / Corporate FDs
Higher interest rates than bank FDs, but not covered by deposit insurance — credit rating matters more here.
Tax-Saving FDs
A 5-year lock-in FD that qualifies for a Section 80C deduction, with no option for premature withdrawal.
Senior Citizen FDs
Offer a rate premium (typically 0.25–0.5% higher) over standard FDs for depositors above a set age.
Mistakes to Avoid
- Locking all savings into one large FD with a single maturity date, then having to break it early and lose interest when a need arises.
- Chasing the highest advertised NBFC rate without checking its credit rating, taking on more risk than the extra return justifies.
- Not accounting for tax on FD interest when comparing the quoted rate to other options, overstating the actual post-tax return.
- Choosing a 5-year tax-saving FD for money that might be needed sooner, without realising premature withdrawal isn't allowed on that product.
Fixed deposit rates and terms are set by the respective bank or NBFC and are subject to change. Deposits with NBFCs are not covered by deposit insurance (DICGC) in the way scheduled bank deposits are.
Interested in Fixed Deposits?
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Related Reading
Fixed Deposits in India: A Complete Guide to Rates, Laddering, and Tax
Fixed deposits in India — bank vs NBFC FDs, laddering strategy, tax-saving FDs, senior citizen rates, and whether an FD or a debt mutual fund actually suits you better.
Read more →Interest Rate Changes: How Interest Rates Affect Investment
How RBI repo rate changes ripple through bonds, stocks, home loans, and fixed deposits — and how to position your portfolio for either direction.
Read more →Impact of Inflation on Savings & Investment in 2026
Inflation in 2026 may reduce purchasing power and savings. Learn how inflation affects investment and your financial plan to protect long-term financial goals.
Read more →Fixed Deposits FAQs
Is FD interest taxable?
Yes — interest earned is fully taxable at your income tax slab rate, and banks deduct TDS if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). It's added to your total income, so the effective return is lower than the quoted rate once tax is accounted for.
What happens if I break my FD before maturity?
Most banks allow premature withdrawal but charge a penalty, typically 0.5–1% lower interest than what you'd otherwise have earned. Some tax-saving FDs (5-year lock-in) don't allow premature withdrawal at all. Checking the specific FD's premature withdrawal terms before investing avoids a surprise later.
Are NBFC fixed deposits safe compared to bank FDs?
Bank FDs are insured up to ₹5 lakh per depositor by DICGC, which NBFC FDs are not. NBFC FDs typically offer higher rates to compensate for that extra risk. Checking the NBFC's credit rating (AAA-rated NBFCs are considered relatively safe) before investing is worth the few minutes it takes.
What is FD laddering and why does it help?
Laddering means splitting one large deposit into several smaller FDs with staggered maturity dates, instead of locking it all into one tenure. This gives you periodic access to funds without breaking a deposit early, while still capturing longer-tenure rates on part of your money.
Is a fixed deposit better than a savings account?
For money you won't need for a while, yes — FDs pay meaningfully more interest than a savings account. But FDs lock in your funds (with a penalty for early exit), so keeping some money in a savings account or liquid fund for genuine emergencies alongside your FDs is the more balanced approach.
What's the difference between cumulative and non-cumulative FDs?
A cumulative FD reinvests the interest and pays it out along with the principal at maturity, which usually means a slightly higher effective return through compounding. A non-cumulative FD pays interest out periodically — monthly, quarterly, or annually — instead, which suits people who want a regular income from the deposit rather than a lump sum at the end.