Fixed Deposits are the most popular savings instrument in India — over ₹200 lakh crore is invested in bank FDs. Despite being considered "boring" by investment experts, FDs play a crucial role in every financial plan as the safe, liquid component. Here's everything you need to know for 2026.
Best FD Interest Rates India 2026
| Bank | 1 Year Rate | 3 Year Rate | 5 Year Rate | Senior Citizen Extra |
|---|---|---|---|---|
| SBI | 6.80% | 6.75% | 6.50% | +0.50% |
| HDFC Bank | 6.60% | 7.00% | 7.00% | +0.50% |
| ICICI Bank | 6.70% | 7.00% | 7.00% | +0.50% |
| Axis Bank | 6.70% | 7.10% | 7.00% | +0.50% |
| Small Finance Banks | 7.5–9.0% | 8.0–9.5% | 7.5–9.0% | +0.25–0.50% |
Small Finance Bank caution: Higher rates come with higher risk. Deposits are insured by DICGC only up to ₹5 lakh per bank per depositor. Don't put more than ₹5 lakh in any single small finance bank.
FD Maturity Calculation
FDs in India compound quarterly. Formula: A = P × (1 + r/4)^(4×t)
Example: ₹5,00,000 at 7% for 3 years = ₹5,00,000 × (1.0175)^12 = ₹6,14,887
TDS on FD Interest
Banks deduct 10% TDS when FD interest exceeds ₹40,000 per year (₹50,000 for seniors). To avoid TDS if your total income is below taxable limit:
- Submit Form 15G (age below 60, income below taxable limit)
- Submit Form 15H (age 60+, income below taxable limit)
- Submit at the beginning of each financial year at your bank
FD vs PPF vs Debt Mutual Funds
| Feature | Bank FD | PPF | Debt Mutual Fund |
|---|---|---|---|
| Returns | 6.5–9% (taxable) | 7.1% (tax-free) | 6–8% (20% LTCG) |
| Safety | DICGC ₹5L insured | Government backed | Market risk |
| Liquidity | Premature penalty | Locked 15 years | T+1 redemption |
| Tax | Interest fully taxable | EEE — fully exempt | 20% LTCG after 3 years |
Use our Compound Interest Calculator to calculate your FD maturity amount with quarterly compounding for any principal, rate, and tenure.