For the investment purpose, fixed deposits are the preferred option as they provide guaranteed returns. FD is a type of term deposit account that promises the investor a fixed interest rate. And in return, the investor agrees not to withdraw or access their funds for a fixed period. In term deposit investments, interest is paid only at the end of the investment period. While investing in an FD, each investor desires for the highest fixed deposit rates but how can one choose it?
How to choose the highest fixed deposit rates?
Here are some of the key factors that every FD investor should consider when investing in a fixed deposit:
- FD Rates – Interest rate for a given term is the primary factor of importance for a depositor as this accounts for his overall FD returns. Banks and NBFCs offer high FD interest rates for higher tenure options. To select the best FD scheme available (based on the high FD interest rate & tenure), you must first focus on a specific financial goal.
Once you have set a specific financial target, you should look for an FD that offers the highest Fixed Deposit rates for your investment tenure.
- Tenure – As mentioned above, the time for which you deposit your money is an important factor while choosing the best Fixed deposit plan. Banks and other NBFCs offer fixed deposits for a term of 7 days to 10 years. You should always choose a deposit tenure based on your financial goals. However, in order to get the highest fixed deposit rates, you should go for a longer tenure FD. For instance, Bajaj Finance FDs provide 7.40% interest on FDs with 12-23 months tenure and 7.60% on FDs with 48 – 60 months tenure.
Another thing you can consider when choosing a deposit term is the interest rate regime. If you think there will be a rising interest rate regime in the future (i.e. interest rates will increase in the future), then you should go for a shorter FD term. And, if the interest rate regime falls (i.e. future interest rates fall), you should invest your hard-earned money for a longer period.
- Payment – The payment option offered by your bank also plays an important role in selecting the best Fixed deposit scheme. Aspirants of highest fixed deposit rates must consider this factor and choose accordingly. Banks in India offer 2 types of Fixed Deposits i.e. Cumulative and non-Cumulative Fixed Deposits.
– Under the cumulative FD scheme, you will not be paid interest quarterly, half-yearly or annually. Rather in this, the FD interest is compounded every quarter, half-year or year and is added back to your principal amount, which is paid at the end of the deposit term.
– Under the non-cumulative FD scheme, you will be paid every quarter, half-year or year depending on the payment option you choose. This FD scheme is well suited for senior citizens and widows who seek regular cash flow.
Although, regular investors must choose cumulative FDs for compounding interest rates.
- Reliability – There are a lot of banks and NBFCs in the market that offer the highest FD interest rates in India. But finding the balance between reliability and high interest rates can sometimes be tough. Making deposits in Banks and NBFCs certified by ICRA, CRISIL is always recommended.
Also, if you want to invest in corporate fixed deposits, you should consider companies based on their credit ratings on the provided deposits. Company deposits with a high credit rating (eg: FAAA, FAA) are considered safe. These ratings indicate a certain amount of security about timely payment of the deposit (principal) and interest.
With ICRA’s MAAA (stable) rating and CRISIL’s FAAA (stable) rating, Bajaj Finance Fixed Deposits is the secured and safest means to park your savings. You can start investing in Bajaj Finance FDs with a minimum deposit of Rs. 25,000 and enjoy interest rates up to 7.85%.
- FD Calculator – Use the FD Calculator monthly interest to check and compare the returns of your FD. The FD Calculator is an online tool that takes values such as deposit amount, tenure (in years/days/months) and the corresponding fixed deposit rate to estimate the maturity amount for the customers. This way, customers can plan their investment wisely as there is a return estimate. The table below shows the banks and NBFCs with the highest fixed deposit rates in India.
Best highest fixed deposit interest rates in 2020
| Name | Tenure of 1 year | Tenure of 3 years | Tenure of 5 years |
| Bajaj Finance | 7.40% | 7.50% | 7.60% |
| SBI | 5.25% | 6.00% | 6.25% |
| ICICI | 4.00% | 6.5% | 6.5% |
| Citi Bank | 3% | 5% | 5% |
| Axis Bank | 3.5% | 6.7% | 6.7% |
| HDFC Bank | 3.5% | 6% | 6% |
| Canara Bank | 4.20% | 6.20% | 6% |
| HDFC Bank | 3.5% | 6% | 6% |
| IDFC First Bank | 4% | 4.5% | 4.6% |
As the only Indian NBFC with an international rating of ‘BBB’ by S&P Global, your investments in Bajaj Finance FDs are never at risk. Apart from the highest FD interest rates in India as shown in the table, Bajaj Finance FDs offer you numerous benefits such as online application of FDs, the facility of loan against fixed deposits, premature withdrawal etc.
Also, you can utilise the Bajaj Finance FD Calculator to easily comprehend which banks or NBFCs are providing the best interest rate as per your choice of tenure and thus compare and choose the best. Best of luck!
For the investment purpose, fixed deposits are the preferred option as they provide guaranteed returns. FD is a type of term deposit account that promises the investor a fixed interest rate. And in return, the investor agrees not to withdraw or access their funds for a fixed period. In term deposit investments, interest is paid only at the end of the investment period.
How to choose the highest fixed deposit rates?
There are some of the key factors that every FD investor should consider when investing in a fixed deposit such as FD interest rate, tenure of the FD, interest rage regime, interest payout options and most importantly the credibility and reliability of the FD provider.
With ICRA’s MAAA (stable) rating and CRISIL’s FAAA (stable) rating, Bajaj Finance Fixed Deposits is the secured and safest means to park your savings.
