Investors’ money is safe in a fixed deposit account and they also get the benefit of guaranteed returns. Banks and financial institutions offer FD schemes with different tenures. An important benefit of keeping money in it is that the investor chooses the tenure according to his own convenience. That is, before investing money in FD, the investor has the option to choose the terms as per his financial needs and by doing so he is able to use his money whenever needed. Apart from this, the investor has the option to withdraw his money and the interest earned on FD and reinvest it whenever he gets a chance to get a higher interest rate.
Short and medium term FDs typically last from a few weeks to a few years, which appeals to investors who prefer to have access to money when needed while earning better returns than a savings account. It is important to explore the benefits of short and medium term FDs and take appropriate action.
Also read: Best FD Rates: These banks are offering up to 9.5% interest on senior citizen FDs, a chance to earn good money in September
Banks and small finance banks offer their customers fixed interest rates on short and medium term FDs which are usually higher than savings accounts but lower than long term FDs. Interest earned on FDs can be distributed at regular intervals or paid in lump sum depending on the investor’s choice and bank policies.
An important advantage of short-term FDs is their liquidity. Investors have the opportunity to park their money for a short period. This facility is especially beneficial for investors who expect to need funds in the near future.
Moreover, FDs are considered one of the safest investment options, especially when held in reputed banking institutions. They are protected by Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance, which covers up to Rs 5 lakh per bank for each depositor, providing an additional protection layer.
Also read: FD Rates: These banks changed FD rates in September, now getting up to 8.49% return, full details
FDs offer guaranteed returns, which differentiates them from market-linked investment options and makes them an ideal choice for conservative investors focused on protecting their capital. In 2024, interest rates for short- and medium-term FDs vary from 4.5% to 8.49% per annum, depending on the bank and the period of deposit. To attract investors, small finance banks often offer higher interest rates than their larger counterparts.
If you need money in the short term, these FDs can be an option for you to earn interest while allowing you access to liquidity during the selected period. In addition, they also provide the possibility of reinvesting your funds when needed. The list below compares FD interest rates of major banks in India, such as State Bank of India, Bank of Baroda, Bank of India, Punjab National Bank, HDFC Bank, ICICI Bank and Axis Bank. You can review this information to decide the option that best matches your investment objectives.
Where are you getting the highest returns on FDs up to 3 years
| Name of the Bank | FD rates up to 1 year | FD rates for 1 to 2 years |
FD rate from 2 to 3 | |
| Maharashtra Bank | 6.9 | 7.15 | 7.25 | |
| Bank Of Baroda | 7.15 | 7.3 | 7.15 | |
| Bank of India | 6 | 7.25 | 6.75 | |
| Canara Bank | 6.25 | 7.25 | 6.85 | |
| Central Bank Of India | 6.25 | 7.45 | 6.5 | |
| Indian Bank | 7.05 | 7.25 | 6.7 | |
| Indian Overseas Bank | 5.75 | 7.3 | 6.8 | |
| Punjab National Bank | 7.05 | 7.25 | 7 | |
| Punjab & Sind Bank | 7.15 | 7.3 | 6.3 | |
| State Bank Of India | 6.5 | 7.25* | 7 | |
| UCO Bank | 5.5 | 7.05 | 6.3 | |
| Union Bank | 7.4 | 7.25 | 6.7 | |
| Axis Bank | 6 | 7.2 | 7.1 | |
| Bandhan Bank | 4.5 | 8 | 7.25 | |
| Catholic Syrian | 7.25 | 7.75 | 7.1 | |
| City Union Bank | 7.5 | 7 | 6.5 | |
| DCB Bank | 7.25 | 8.05 | 7.55 | |
| Dhanlaxmi Bank | 5 | 7.25 | 6.5 | |
| Federal Bank | 6.5 | 7.35 | 7.4 | |
| HDFC Bank | 6 | 7.25 | 7.35 | |
| ICICI Bank | 6 | 7.25 | 7 | |
| IDBI Bank | 7.05 | 7.35 | 7 | |
| IDFC First Bank | 5.75 | 7.75 | 7.25 | |
| IndusInd Bank | 6.5 | 7.75 | 7.25 | |
| J&K Bank | 6.25 | 7 | 7 | |
| Karnataka Bank | 6.75 | 7.5 | 6.5 | |
| Kotak Bank | 7 | 7.4 | 7.15 | |
| Karur Vysya Bank | 7.4 | 7.5 | 7.6 | |
| RBL Bank | 6.05 | 8.1 | 7.5 | |
| South Indian Bank | 5 | 7.25 | 7 | |
| Tamilnad Mercantile Bank | 6 | 7.5 | 6.75 | |
| TNSC Bank | 6.75 | 7.75 | 6.75 | |
| Yes Bank | 6.35 | 8 | 7.25 | |
| AU Small Finance Bank | 7.25 | 8 | 7.5 | |
| Equitas Small Finance Bank | 6.25 | 8.5 | 8.25 | |
| ESAF Small Finance Bank | 6 | 8.25 | 8.25 | |
| Jana Small Finance Bank | 8 | 8.25 | 8.25 | |
| Ujjivan Small Finance Bank | 7 | 8.25 | 7.75 | |
(Note: This list of banks has been prepared by BankBazaar.com. Information related to the interest rate on FDs with tenure of less than one year and up to 3 years has been collected from the official website of the respective banks. All these updates are till 6 September. These are the interest rates of the banks included in the list on FDs of up to 3 years. Investors can avail the benefit by keeping less than Rs 1 crore in the bank. Please note that banks keep changing rates from time to time. In such a situation, before investing in the FD scheme of any bank, get accurate information on the official website of the concerned bank or your nearest branch.,
