Fixed Deposit India: Best Rates, Tax Rules, and Where to Invest

When you think of safe investments in India, fixed deposit, a low-risk savings instrument where you lock in money for a fixed period to earn interest. Also known as term deposit, it’s the go-to choice for millions who want to protect their savings while earning more than a regular savings account. Unlike stocks or mutual funds, a fixed deposit doesn’t swing with the market. You know exactly how much you’ll get back—principal plus interest—on the maturity date. That’s why retirees, students saving for college, and families building an emergency fund all turn to FDs.

But not all fixed deposits are the same. bank fixed deposit, an FD offered by scheduled banks regulated by the Reserve Bank of India usually gives you lower rates but comes with deposit insurance up to ₹5 lakh. On the other hand, corporate fixed deposit, an FD issued by non-banking financial companies (NBFCs) or large corporations often pays higher interest—sometimes 1-2% more—but carries more risk since they’re not covered by deposit insurance. Then there’s the tax on fixed deposit, the income tax you pay on interest earned, not the principal. If your interest crosses ₹40,000 a year (₹50,000 for seniors), banks will deduct TDS. But you can avoid this by submitting Form 15G or 15H if you’re below the taxable income limit.

People often assume FDs are boring. But smart investors use them as a foundation. They pair a high-interest FD with a short-term goal—like a down payment on a car or your kid’s school fees—while keeping the rest of their money in growth options. Some even build an FD ladder: splitting their money into multiple deposits with different maturity dates so they get access to cash every few months without losing out on interest. And with inflation hovering around 5%, even a 6.5% FD rate can be a real win if you’re avoiding risk.

What you’ll find below are real, practical guides on how to pick the best FD in India—not just the one with the highest headline rate. We cover which banks offer the best returns right now, how to minimize tax on your interest, what happens if you break your FD early, and why some corporate FDs are worth the extra risk. No fluff. No hype. Just what actually matters when your money is on the line.