FD Interest Rates - Check Latest Fixed Deposit Interest Rates

FD Rates for NRE/NRO Customers

Non-Resident Indians have access to specialised fixed deposit options through NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts, each serving different purposes and offering distinct rate structures.

NRE FD rates are typically aligned with domestic FD rates, ranging from 4% to 7% per annum, depending on the bank and tenure. These deposits allow complete repatriation of both principal and interest, making them attractive for NRIs planning to bring money back to India.

NRO fixed deposit rates follow similar patterns but serve different needs. These accounts handle income earned in India, such as rental income or dividends. NRO fixed deposit interest rates generally mirror domestic rates, though some banks offer marginal premiums to attract NRI investments.

Special Features of Fixed Deposit Interest Rates

Fixed deposits come with several distinctive characteristics that make them attractive to savers. Fixed deposit interest rates vary significantly across financial institutions, influenced by factors such as deposit tenure, amount invested, and the bank's liquidity requirements. Longer tenures typically attract higher rates, though this isn't always guaranteed.

Senior citizens enjoy preferential treatment with FD interest rates, receiving an additional 0.25% to 0.75% above standard rates. This benefit recognises their financial needs during retirement years.

Key features include:

Cumulative vs Non-cumulative options: Choose between compound growth or regular income
• Tax-saving FDs: Qualify for Section 80C deductions up to ₹1.5 lakh annually
• Nomination facility: Ensures smooth transfer to beneficiaries
• Loan facility: Borrow up to 90% of your FD value
• Auto-renewal: Automatic reinvestment at prevailing rates

The Reserve Bank of India's monetary policies directly impact FD interest rates, with repo rate changes reflecting in deposit rates across banks. Understanding these features helps you maximise returns whilst meeting your financial objectives.

TDS on Fixed Deposit Interest

Tax Deducted at Source (TDS) applies when your aggregate interest income from all fixed deposits with a single bank exceeds specific thresholds. For regular depositors, TDS kicks in when annual interest earnings cross ₹40,000, whilst senior citizens enjoy a higher threshold of ₹50,000.

The TDS rate stands at 10% of the interest earned above these limits. However, if you haven't provided your Permanent Account Number (PAN) to the bank, TDS is deducted at a higher rate of 20%.

Important considerations:

Form 15G/15H - Submit these forms if your total income falls below the taxable limit to avoid TDS
• Quarterly TDS - Banks deduct TDS quarterly, not annually
• TDS certificate - Banks provide Form 16A for tax filing purposes
• Advance tax planning - Consider spreading deposits across different banks to stay within TDS limits

NRE FD interest rates and NRO FD interest rates also attract TDS, though NRE deposits remain tax-free for non-residents. This tax on FD interest income aspect significantly impacts your net returns from fixed deposits.

Premature Withdrawal and Its Impact on FD Interest Rates

Breaking your fixed deposit before maturity affects the interest you receive, making it crucial to understand the penalty structure. Most banks reduce the applicable FD interest rate by 0.5% to 1% when you withdraw prematurely, though policies vary across institutions.

The revised interest calculation typically works as follows:

Withdrawal Period	Interest Rate Applied
Within 7 days	No interest paid
7 days to 1 year	Rate applicable for actual period minus penalty
Above 1 year	Rate for completed period minus penalty

NRE fixed deposit rates and NRO fixed deposit accounts follow similar penalty structures, though some banks offer more flexible terms for non-resident accounts.

Planning your investment horizon carefully helps avoid such penalties whilst maintaining liquidity for genuine emergencies.

How to Apply for a Fixed Deposit (FD) with Airtel Finance?

Opening an Airtel Finance fixed deposit offers a streamlined digital experience with competitive returns. The process eliminates traditional banking hassles while providing access to partner banks offering attractive FD interest rates.

Application steps:

Download the Airtel Thanks App: Available on Android and iOS platforms
• Complete KYC verification: Upload PAN and Aadhaar documents
• Choose your deposit amount: Minimum investment starts from ₹1,000
• Select tenure: Pick from flexible terms ranging from 7 days to 10 years
• Review interest rates: Compare offerings from partner banks

Key benefits include:

Competitive rates: Earn up to 8.75% interest annually
• Senior citizen benefits: Enhanced FD interest rate for senior citizens
• Digital convenience: Complete process through mobile app
• DICGC insurance: Deposits protected up to ₹5 lakhs
• Flexible withdrawals: Premature withdrawal allowed after 7 days

The entire process completes within minutes, with instant confirmation and digital certificates. Partner banks include established names like Bajaj Finserv, Suryoday, and South Indian Bank, ensuring your investments remain secure while earning optimal returns.

Frequently Asked Questions on FD Interest Rates

FD interest rates are the annual percentage on your deposit. For example, ₹1,00,000 at 7% yields ₹7,000 yearly. The calculation method affects your returns: simple interest pays a fixed amount, while compound interest adds earned interest back, growing your investment exponentially. Most FDs use compound interest.

Banks possess the flexibility to modify their FD interest rates at any time, though they typically align these changes with broader economic developments. Most adjustments occur following RBI policy announcements, particularly when the central bank alters the repo rate or other key policy rates.

The RBI wields considerable influence over FD interest rates through its monetary policy framework. When the RBI increases the repo rate, borrowing becomes more expensive for banks. To maintain their profit margins and attract deposits, banks typically raise their FD interest rates. Conversely, when the RBI reduces the repo rate to stimulate economic growth, banks often lower their deposit rates accordingly.

Airtel Finance fixed deposit currently offers attractive interest rates of up to 8.75% per annum, with enhanced rates available for women and senior citizens. This competitive rate structure makes it an appealing option for investors seeking better returns than traditional savings accounts.

FD interest rates vary significantly across different tenures, with longer-term deposits typically offering higher returns. Typical rate progression:

7 days to 6 months: Lower rates (4-6% range)
• 6 months to 2 years: Moderate rates (6-7% range)
• 2-5 years: Higher rates (7-8% range)
• 5+ years: Premium rates (8%+ range)

Senior citizens (typically aged 60 and above) enjoy preferential FD interest rates that are usually 0.25% to 0.50% higher than standard rates. This additional interest, known as a senior citizen premium, recognises their greater dependence on fixed-income investments for retirement planning.

Simple interest calculates returns only on your original principal amount, whilst compound interest adds earned interest back to the principal, creating exponential growth over time. Most FDs use compound interest, significantly enhancing your fixed deposit interest rate returns.

Cumulative and non-cumulative FDs represent two distinct payout structures that cater to different investor needs, though both offer the same base fixed deposit interest rate. Cumulative FDs reinvest all interest earnings, allowing them to compound throughout the investment period. Non-cumulative FDs pay out interest at regular intervals – monthly, quarterly, half-yearly, or annually—while your principal remains invested. This provides steady income but foregoes the compounding benefit.

For cumulative FDs with compound interest, use this formula:
Maturity Amount = P × (1 + r/n)^(n×t)

Where:
• P = Principal amount
• r = Annual fixed deposit interest rate (as decimal)
• n = Compounding frequency per year
• t = Tenure in years

For non-cumulative FDs with regular payouts:
Annual Interest = Principal × Interest Rate
Monthly Interest = Annual Interest ÷ 12

Many banks provide online FD calculators that simplify this process.

Interest earned on FDs is taxable under “Income from Other Sources” and added to your total income. Banks deduct 10% TDS if annual interest exceeds ₹40,000 (₹50,000 for seniors). Without PAN, TDS is 20%. You can submit Form 15G/15H to avoid TDS if your income is below the taxable limit.

What Are Fixed Deposit (FD) Interest Rates?

Fixed Deposit (FD) interest rates are the returns that banks and financial institutionsoffer on fixed deposits over a specified tenure. These rates are predetermined and fixed for the entire duration of the FD. Typically, longer tenures attract higher rates. Banks may also offer higher rates to senior citizens as an additional benefit. Book your FD from Airtel Financetoday and get interest rates up to 8.15% annually.

Factors Affecting Rate Of Interest On Fixed Deposit

Here are some of the factors that affect the interest rate on your fixed deposit:

Economic growth and inflation rates influence interest rates. Higher inflation typically leads to higher interest rates.

Changes in the repo rate and other monetary policies directly impact FD rates.

Banks with higher liquidity needs may offer more attractive FD rates to attract deposits.

Longer tenures often attract higher interest rates, though this can vary.

Higher deposit amounts may qualify for better interest rates.

Banks can also adjust rates to stay competitive.

Senior citizens often receive higher interest rates.

FD Interest Rates for Different Customer Segments

Interest Rates for Regular Investors

Special Rates for Senior Citizens

NRE/NRO FD Interest Rates

Here are the FD interest rates for the different types of customer segments:

Interest Rates for Regular Investors

For regular investors, FD interest rates are determined by factors such as the deposit amount, tenure, and prevailing economic conditions. These rates are fixed for the duration of the FD and generally range from 6% to 9% per annum, depending on the bank and the deposit period.

Special Rates for Senior Citizens

Senior citizens typically enjoy higher FD interest rates. This additional interest usually ranges from 0.25% to 0.75% above the regular rates.

NRE/NRO FD Interest Rates

Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts offer FD interest rates that are competitive and often similar to regular domestic rates. NRE FDs are tax-free in India, while NRO FDs are subject to Indian taxes, including interest income. The rates for these accounts can vary from 5% to 7% per annum, depending on the bank and tenure.

>Tax Implications on FD Interest Rates

Tax on Interest Earned

Tax-saving Fixed Deposits

Here are the tax implications on FD interest rates:

Tax on Interest Earned

Interest earned on Fixed Deposits (FDs) is fully taxable as per the investor’s income tax slab. Banks deduct Tax Deducted at Source (TDS) at 10% if the interest income exceeds ₹40,000 per annum (₹50,000 for senior citizens). If the depositor’s income is below the taxable limit, they can submit Form 15G or 15H to avoid TDS.

Tax-saving Fixed Deposits

Tax-saving Fixed Deposits offer tax benefits under Section 80C of the Income Tax Act, allowing a deduction of up to ₹1.5 lakh per year. These FDs come with a lock-in period of 5 years, during which the deposit cannot be prematurely withdrawn. However, the interest earned on these deposits is taxable.

Premature Withdrawal and Its Impact on FD Interest Rates

Penalties for Premature Withdrawal

Impact on Interest Rates

Penalties for Premature Withdrawal

Premature withdrawal of a Fixed Deposit (FD) typically incurs penalties. Banks may charge a penalty fee, which is usually a percentage of the interest earned or a reduction in the interest rate applicable to the deposit. This fee varies across banks and can significantly reduce the overall returns from the FD.

Impact on Interest Rates

When an FD is withdrawn prematurely, the interest rate applied is often lower than the originally agreed rate. The revised rate is usually the rate applicable for the period the FD was actually held, minus any penalty charges. This adjustment can result in substantially lower ROI compared to holding the FD till maturity.