Fixed Deposits (FDs) have always been a safe and reliable investment option for individuals looking to earn guaranteed returns without market risks. With interest rates fluctuating, many banks are now offering lucrative rates on 3-year FDs, making it an opportune time to invest.
High Interest Rates on 3-Year Fixed Deposits
| Feature | Details |
|---|---|
| Best Interest Rate | Up to 7.65% (Bank of Baroda) |
| Best Small Finance Bank Rate | Up to 9.00% (NorthEast Small Finance Bank) |
| Ideal for | Conservative investors, retirees, and those seeking risk-free returns |
| Deposit Insurance | Up to ₹5 lakh insured by DICGC (Deposit Insurance and Credit Guarantee Corporation) |
With interest rates attractive and stable, now is a great time to invest in Fixed Deposits. Whether you choose a top private bank like HDFC or ICICI or go for high-return small finance banks, FDs remain one of the safest and most reliable investment options. Compare rates, consider taxation, and invest wisely to maximize returns!
Why Invest in a Fixed Deposit Now?
Fixed Deposits provide security, predictable returns, and flexible tenure options. With the RBI maintaining stable interest rates, banks have revised their FD interest rates upwards in recent months.
Here are some compelling reasons to invest in a 3-year FD:
- Higher returns: Many banks are offering rates above 7%, making FDs attractive compared to savings accounts.
- Low risk: Unlike stocks or mutual funds, FDs are unaffected by market volatility.
- Flexible liquidity options: Although locked for 3 years, FDs offer premature withdrawal with nominal penalties.
see also: NSC vs Bank FD Where to Invest to Save Tax?
Top 7 Banks Offering Highest Interest Rates on 3-Year FDs
Here’s a comparison of the best interest rates from top banks in India:
| Bank Name | Regular FD Rate | Senior Citizen Rate |
|---|---|---|
| HDFC Bank | 7.00% | 7.50% |
| ICICI Bank | 7.00% | 7.50% |
| Kotak Mahindra Bank | 7.00% | 7.60% |
| Federal Bank | 7.10% | 7.60% |
| State Bank of India (SBI) | 6.75% | 7.25% |
| Bank of Baroda | 7.15% | 7.65% |
| Union Bank of India | 6.70% | 7.20% |
Small Finance Banks Offering Even Higher Rates
For those looking for higher returns, small finance banks provide interest rates as high as 9% on 3-year FDs. Here’s a list:
| Bank Name | Interest Rate (%) |
|---|---|
| NorthEast Small Finance Bank | 9.00% |
| Suryoday Small Finance Bank | 8.60% |
| Utkarsh Small Finance Bank | 8.50% |
| Jana Small Finance Bank | 8.25% |
| Unity Small Finance Bank | 8.15% |
Are Small Finance Banks Safe?
Yes! Deposits in small finance banks are covered under DICGC insurance (up to ₹5 lakh). However, as these banks are relatively new, it’s wise to invest within the insured limit to mitigate risk.
How to Choose the Best Fixed Deposit?
1. Compare Interest Rates
Look for banks offering the highest rates while ensuring they have a good financial standing.
2. Check Premature Withdrawal Terms
Some banks impose higher penalties for early withdrawals. Always check liquidity options before investing.
3. Tax Considerations
Interest earned on FDs is taxable under the depositor’s income slab. Consider investing in tax-saving FDs if eligible.
क्रेडिट कार्ड धारकों के लिए जरूरी खबर! इस प्राइवेट बैंक ने बदले बड़े नियम, 20 फरवरी से लागू
4. Invest Within Insurance Limits
For added safety, invest up to ₹5 lakh per bank (covered under DICGC insurance) to ensure risk-free returns.
see also: LIC Fixed Deposit Scheme Start with ₹10,000, Get Interest Up to 6.25%
High Interest Rates on 3-Year Fixed Deposits FAQs
1. Which bank gives the highest FD interest rate in India?
Currently, NorthEast Small Finance Bank offers the highest interest rate at 9% for a 3-year FD.
2. Are FDs better than mutual funds?
It depends on your risk tolerance. FDs offer guaranteed returns with no market risks, while mutual funds can provide higher returns but involve risks.
3. Is FD interest taxable?
Yes, FD interest is taxable under ‘Income from Other Sources’ as per your tax slab. However, banks deduct TDS at 10% if interest exceeds ₹40,000 (₹50,000 for senior citizens).
4. Can I break my FD before maturity?
Yes, but a penalty is applied. The penalty amount varies by bank and can reduce the effective interest earned.
5. Is investing in small finance banks safe?
Small finance banks are regulated by the RBI, and deposits up to ₹5 lakh are insured. However, for added security, it’s advisable to invest only within insured limits.
