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General Interest Rate Range

  • Fixed deposit (FD) interest rates in India typically range from 2.75% to 8.50% per annum.
  • Rates vary based on the bank, deposit tenure, and deposit amount.
  • Public sector banks generally offer between 5.00% and 7.25%.
  • Private and small finance banks may offer higher rates, up to 8.50% for specific periods.
  • Rates are announced and revised periodically based on market and policy factors.

Interest Rates by Tenure

  • Short-term FDs (7 days to 1 year) earn 2.75% to 6.50% depending on the bank.
  • Medium-term FDs (1 to 5 years) attract 6.00% to 7.50%, considered optimal for compounding.
  • Long-term FDs (5 to 10 years) generally offer between 6.25% to 7.25%.
  • Banks may introduce promotional tenures like 444 days or 999 days with special rates.
  • Longer tenure doesn’t always mean higher rates—some banks offer peak rates at mid-range durations.

Senior Citizen Benefits

  • Senior citizens receive an additional 0.25% to 0.75% interest over standard FD rates.
  • Most banks offer these enhanced rates for tenures starting from 6 months.
  • Some banks run special schemes for seniors with attractive long-term rates.
  • The senior citizen benefit applies only to Indian residents aged 60 years and above.
  • Rates are clearly displayed on bank websites and brochures.

Bank-Wise Rate Variations

  • Public Sector Banks: SBI, PNB, and Bank of Baroda offer 5.50% to 7.25% for common tenures.
  • Private Banks: ICICI, HDFC, and Axis offer between 6.00% and 7.75%, depending on tenure.
  • Small Finance Banks: AU, Jana, and Ujjivan offer the highest rates, often above 8.00%.
  • Cooperative Banks: Offer competitive rates, but with variable risk profiles.
  • Rate comparison helps optimize returns based on deposit goals and safety.

Payout and Compounding Options

  • Interest can be paid out monthly, quarterly, or annually in non-cumulative FDs.
  • Cumulative FDs reinvest interest, compounding quarterly or annually.
  • The compounding frequency affects the effective yield.
  • Monthly payout FDs are suited for pensioners and fixed-income seekers.
  • Investors can choose payout style based on income preference and financial planning.
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