India's Largest Lending Platform | Fibe (formerly EarlySalary

The Bank of Maharashtra offers diverse tenure options on FDs with competitive interest rates. While the Bank of Maharashtra FD rates are quite lucrative, they have a range of special tenures that come with higher rates as well. Just like any other bank FD, you can also get higher interest as a senior citizen.

Read on to learn about the Maharashtra Bank fixed deposit rate across different timelines and make a smart decision. 

Current Fixed Deposit Interest Rates 

Here is a list of Bank of Maharashtra FD rates, which you can get for deposits under ₹3 crores. 

Investment Tenure	Annual Interest Rate for Regular Citizens	Annual Interest Rate for Senior Citizens
7 days to 30 days	2.75%	2.75%
31 days to 45 days	3%	3%
46 days to 90 days	4.75%	4.75%
91 days to 119 days	5%	5.50%
120 days to 180 days	5.25%	5.75%
181 days to 270 days	5.75%	6.25%
271 days to 364 days	5.75%	6.25%
1 year	6.75%	7.25%
Above 1 year to 2 years	6.50%	7.00%
Above 2 years to 3 years	6.50%	7.00%
Above3 years to 5 years	6.50%	7.00%
Above 5 years	6.50%	7.00%

Disclaimer: Interest rates are subject to change. Please check the latest rates before you invest. 

If you invest a higher sum, then the interest rates may vary. Furthermore, existing or retired spouse of bank staff get an additional 1% interest on their deposit. If you withdraw your FD deposit before the tenure, it attracts a penalty of 1% of the offered Maharashtra Bank fixed deposit rate. 

Also Read : Short Term FD vs Long Term FD

Interest Rates on Special Schemes

This bank also offers higher interest rates for certain tenures. These special Bank of Maharashtra FD rates are as follows:

Investment Tenure	Annual Interest Rate for Regular Citizens	Annual Interest Rate for Senior Citizens
200 days	6.90%	7.40%
333 days	7.35%	7.85%
400 days	7.10%	7.60%
777 days	7.25%	7.75%

Disclaimer: Interest rates are subject to change. Please check the latest rates before you invest. 

Bank of Maharashtra Fixed Deposit Features 

Here are some features that make the Bank of Maharashtra FD an ideal choice:

• You can add a nominee to your FD account 
• Parents and guardians can open an account for a minor as well
• You can move your fixed deposit account into any branch and enjoy existing Bank of Maharashtra FD rates
• The minimum deposit amount is ₹1,000, with subsequent deposits allowed in multiples of ₹100
• Firms, businesses, clubs, engineers, doctors, and even students are eligible to open an account

Steps to Open a Bank of Maharashtra FD

Through Internet Banking

You can follow the below-mentioned steps to successfully open your fixed deposit account:

• Log in to the net banking account
• Choose ‘Term Deposit’ from the home page
• Select the type of deposit scheme you prefer
• Fill out the form along with your nominee details, maturity instructions and other information
• Complete the verification process
• Click on ‘Submit’

Within the next 24 hours, you will receive confirmation via SMS. 

Via Mobile App

To open your FD account via your Bank of Maharashtra mobile app, follow these steps:

• Download the app 
• Complete the signing-in process
• Navigate to ‘Term Deposit’
• Select your preferred FD account type
• Fill out the application form
• Add maturity instructions, nominee details and payment options
• Submit your request, and within the next 24 hours you will receive a confirmation SMS

At a Branch Offline

If you are more comfortable with the offline process, you can also go to your nearest Bank of Maharashtra branch and book your FD. You will need to follow these steps:

• Ask for the FD account form
• Fill out the form
• Submit the form with the required documents
• Receive the fixed deposit receipt after processing

Fixed deposit rates in the Bank of Maharashtra are competitive, and you can earn attractive returns. You can choose to receive the payout at maturity or regular intervals as per your preferences. Remember, special returns have the highest fixed deposit rates in the Bank of Maharashtra. 

FAQs on Bank of Maharashtra Fixed Deposit Interest Rates

Do senior citizens get extra benefits by investing in Bank of Maharashtra FD Schemes?

Across most tenures, senior citizens get comparatively higher fixed deposit rates in the Bank of Maharashtra. These rates are around 0.50% higher than those offered to non-senior citizens. 

Is it possible to open a Bank of Maharashtra Fixed Deposit without a PAN card?

To open a Bank of Maharashtra Fixed Deposit FD account you will have to submit your ID and address proof for verification. However, a PAN card is not mandatory. If you have other proofs available, you can submit them.  

Union Bank offers Fixed Deposit interest rates that vary depending on the deposit term. You can earn returns on deposits short as 7 days and higher returns on longer-term and special FDs with senior citizens getting additional benefits. 

If you want an investment with fixed returns, Union Bank FDs can help your savings grow steadily while keeping your capital safe. 

This blog explains Union Bank FD interest rates, including rates for different terms, benefits for senior citizens and tax rules. It also covers withdrawal rules, who can invest and tips, on choosing the right FD term for your goals. Whether you are saving for emergencies planning retirement or want returns, this guide will help you decide. 

Latest Union Bank FD Interest Rates 

Union Bank of India offers different FD interest rates depending on the tenure and depositor category. Generally, longer tenures provide higher returns. Senior citizens and super senior citizens receive additional interest benefits over regular depositors. 

Here’s an overview of the latest Union Bank FD interest rates for deposits below ₹3 crores: 

Tenure	General Citizens	Senior Citizens
7 – 14 Days	3.50%	4.00%
15 – 30 Days	3.50%	4.00%
31 – 45 Days	3.50%	4.00%
46 – 90 Days	4.50%	5.00%
91 – 120 Days	4.80%	5.30%
121 – 180 Days	5.00%	5.50%
181 Days – Less than 1 Year	6.25%	6.75%
1 Year	6.80%	7.30%
456 Days (Special Tenure)	7.30%	7.80%
Above 2 Years to 5 Years	6.50%	7.00%
Above 5 Years to 10 Years	6.25%	6.75%

Disclaimer: FD interest rates are subject to change based on RBI policy revisions and bank decisions. Always verify the latest rates on Union Bank’s official website or branch before investing. 

Advantages of a Union Bank Fixed Deposit 

Apart from competitive returns, Union Bank fixed deposits offer several investor-friendly features that make them suitable for different financial needs. 

Nominal Deposit Amount 

You can start investing with as little as ₹1,000, making FDs accessible even for first-time investors or students beginning their savings journey. There is no upper investment limit, which also makes it suitable for high-value investors. 

Real-life example: 

A young salaried employee earning ₹30,000 per month can start with a ₹5,000 FD and gradually build disciplined savings without requiring a large initial corpus. 

Loan and Nomination Facility 

Union Bank allows you to pledge your FD as collateral for a loan during emergencies. This means you can access funds without prematurely breaking your deposit. 

You can also nominate a family member or beneficiary, ensuring smooth claim settlement in unforeseen situations. 

Why this matters: 

Instead of withdrawing your FD and losing interest benefits, you may borrow against it at comparatively lower interest rates. 

Auto-Renewal System 

Union Bank offers an auto-renewal feature where your FD amount gets automatically reinvested after maturity if no maturity instructions are provided. 

This helps investors continue earning returns without interruption and avoids idle funds sitting in savings accounts at lower interest rates. 

Also Read: Fixed Deposit Auto Renewal 

Union Bank FD Rates for Senior Citizens 

Union Bank provides additional interest benefits to senior and super senior citizens to support retirement income planning. 

• Senior citizens aged 60 years and above receive an additional 0.50% interest on deposits up to ₹5 crores 

• Super senior citizens aged 80 years and above receive an additional 0.75% interest benefit 

Why senior citizen FDs are popular 

For retirees seeking stable monthly income, FDs remain one of the safest investment choices in India. Many senior citizens prefer FDs because: 

• Returns are fixed and predictable 

• Capital remains relatively safe 

• Monthly or quarterly payout options are available 

• Interest rates are higher than regular savings accounts 

Taxation and Real Returns 

While fixed deposits provide guaranteed returns, taxation significantly impacts your actual earnings. Understanding post-tax returns is essential before investing. 

Important Taxation Points 

• Interest earned on FD is fully taxable under “Income from Other Sources” 

• Banks deduct TDS if annual FD interest exceeds the prescribed threshold 

• Your tax slab directly affects your final returns 

• Senior citizens may submit Form 15H to avoid TDS if eligible 

• Non-senior citizens can submit Form 15G if taxable income falls below exemption limits 

• Tax-saving FDs with a 5-year lock-in qualify for deductions under Section 80C up to ₹1.5 lakh 

Understanding Real Returns 

Your real return is the actual gain after adjusting for: 

• Tax 

• Inflation 

• Premature withdrawal penalties (if any) 

For example: If your FD earns 7% annually but inflation is 5%, your actual wealth growth is only around 2% before tax. After tax deductions, the effective gain may reduce further. 

This is why comparing post-tax returns is equally important while selecting an FD tenure. 

Eligibility for Union Bank Fixed Deposit 

To open a fixed deposit account with Union Bank of India, the following entities are eligible: 

• Indian residents 

• Institutions or agencies 

• Associations 

• Societies 

• Clubs and trusts 

• Joint account holders 

• Minors with a guardian or adult co-account holder 

Premature Withdrawal Rules 

Union Bank allows premature FD withdrawal, but doing so may attract a penalty. 

Typically, a penalty of up to 1% reduction in interest rate applies on early withdrawal. 

Example of Premature Withdrawal 

Suppose you invest in a 1-year FD at an interest rate of 6.80%. If you withdraw the amount before maturity, the applicable interest may reduce to 5.80% after penalty adjustment. 

Things to Consider Before Breaking an FD 

• You may lose expected returns 

• Penalties reduce actual earnings 

• Tax liability on earned interest still applies 

• Emergency funds should ideally be kept separately 

How to Choose the Right FD Tenure 

Selecting the ideal FD tenure depends on your financial goals and liquidity needs. 

Financial Goal	Suggested FD Tenure
Emergency fund	6 months – 1 year
Vacation planning	1 – 2 years
Child education savings	3 – 5 years
Retirement income	5 years or more
Tax saving	5-year tax-saving FD

Pro Tip 

Instead of investing a lump sum into one FD, many investors use an FD laddering strategy. This involves splitting money across multiple tenures to balance liquidity and returns. 

The Bottom Line 

Union Bank Fixed Deposits can be a suitable investment option for individuals seeking capital safety, predictable returns, and flexible tenure options. With deposits starting at just ₹1,000 and additional benefits for senior citizens, Union Bank FDs cater to a wide range of investors. 

Before investing, compare the latest FD rates, evaluate post-tax returns, and align the tenure with your financial goals. If liquidity is a concern, choosing shorter tenures or creating an FD ladder may help maintain flexibility while still earning stable returns. 

Using an FD calculator before investing can also help estimate maturity value and make better financial decisions. 

FAQs on Union Bank Fixed Deposit Interest Rates 

What is the highest Union Bank FD interest rate? 

Currently, the highest Union Bank FD interest rate is 7.80% for senior citizens on the special tenure of 456 days. General citizens can earn up to 7.30% for the same tenure. 

What is the minimum amount required to open an FD with Union Bank? 

You can start a Union Bank fixed deposit with a minimum amount of ₹1,000. 

What are the current FD interest rates of Union Bank of India? 

Union Bank FD interest rates generally range between 3.50% and 7.30% for regular citizens, depending on the tenure. Senior citizens receive additional interest benefits. 

What is the minimum and maximum tenure for Union Bank FD? 

The minimum FD tenure usually starts from 7 days, while the maximum tenure can extend up to 10 years. 

Are senior citizens offered higher FD interest rates? 

Yes. Senior citizens receive an additional 0.50% interest, while super senior citizens may receive up to 0.75% extra interest on eligible deposits. 

Can I withdraw my Union Bank FD before maturity? 

Yes, Union Bank allows premature withdrawal of fixed deposits. However, a penalty of up to 1% lower interest may apply. 

Is the interest earned on Union Bank FD taxable? 

Yes, FD interest is taxable as per your income tax slab. TDS may also apply if annual interest crosses the prescribed threshold. 

Can I get a loan against my Union Bank FD? 

Yes. Union Bank allows depositors to avail loans or overdraft facilities against eligible fixed deposits.

As our lives get busier than ever, it becomes difficult to think about the planet and take steps to promote sustainability. This is where green deposits can provide you with a solution that is also doubly beneficial – the ability to earn high returns while ensuring your funds are invested in causes that further the environment and reduce climate risks. Read on to learn how a green fixed deposit works, its benefits, the interest rates offered and more. 

What is a Green Deposit?

It is a type of fixed deposit similar to any other type of fixed deposit in terms of investment. Its distinguishing factor is that the funds from green deposits are redirected towards eco-friendly projects such as: 

• Reducing pollution 
• Sustainable farming practices 
• Generating clean energy 
• Reducing the carbon footprint 
• Wastewater management 
• Clean air projects
• Green construction

How Does it Work?

These deposits aren’t very different from regular fixed deposits that you can invest in with banks and other financial institutions. The key difference is that your investment in green deposits is directed towards projects that support sustainability and environmentally-friendly businesses. 

Green Deposit Interest Rate

The following table includes the latest interest rates for green fixed deposits that you can choose from. 

Banks	Interest Rate for Regular Citizen		Interest Rate for Senior Citizen
	Minimum	Maximum	Minimum	Maximum
AU Small Finance	7.25% p.a.	8.00% p.a.	7.75% p.a.	8.50% p.a.
Bank of Baroda	6.45% p.a.	7.10% p.a.	7.30% p.a.	7.60% p.a.
Canara Bank	6.65% p.a.	6.70% p.a.	7.15% p.a.	7.20% p.a.
Central Bank of India	5.70% p.a.	5.80% p.a.	6.20% p.a.	6.30% p.a.
HDFC Bank	6.95% p.a.	7.55% p.a.	7.20% p.a.	7.80% p.a.
IDFC FIRST Bank	6.80% p.a.	6.80% p.a.	7.30% p.a.	7.30% p.a.
State Bank of India	6.40% p.a.	6.65% p.a.	7.15% p.a.	7.40% p.a.
South Indian Bank	6.50% p.a.	6.50% p.a.	7.00% p.a.	7.00% p.a.
Yes Bank	7.50% p.a.	7.50% p.a.	8.00% p.a.	8.00% p.a.

Advantages of Opting for Green Deposit

Here are all the reasons why investing in green deposits is smart.

• Financial Growth 

It offers lucrative interest rates that can help you meet your monetary goals. You can invest as per the financial institution’s minimum investment amount and plan out your returns based on the interest rate.

• Environmental Impact 

While it is good for your financial health, this option also works in favour of the environment. It helps finance all eco-friendly projects that can help the nation’s development while being cognizant of the planet as a whole. 

• Secure Investment

Since it works like any other bank FD, it is a good option for risk-averse investors. This is because your investment is not subject to market fluctuations. This way, you can get predictable and guaranteed returns, which are higher than returns offered by savings accounts.

• Inclusive

The eligibility criteria for this type of FD are lenient and straightforward. As such, the following entities can apply for it: 

• Individuals
• Hindu Undivided Family 
• Sole proprietorships
• Society 
• Clubs 
• Non-profit organisation 
• Corporate entities

There may be certain terms applied to different entities as per the issuer. Hence, it is best to check the criteria before applying.  

Benefits For Senior Citizens

Like with other FDs, senior citizens can enjoy additional interest rates of 0.25% to 0.50% or more. 

Now that you know all the perks you can enjoy with this kind of term deposit, it’s best to understand its limitations as well. Firstly, it may come with restricted tenures, reducing its flexibility as an investment option. In addition, such deposits usually do not offer tax benefits.  So, compare all your options and analyse your financial needs before investing. 

FAQs on Green Deposit

Are green deposits a safe investment option?

Similar to regular fixed deposits, they are a secure investment option with very low risk. 

Can individuals participate in green deposit programs, or are they only for businesses?

Banks and financial institutions allow individuals to invest in green deposits.

Investments are a smart solution for long-term wealth generation. Choosing a secure and easy-to-avail option can help you create a more balanced portfolio. Two options you can consider are the National Savings Certificate and fixed deposits. When you compare NSC and FDs, you may find that they both have several advantages and limitations. This is why choosing between them can be a tough decision.

Only after evaluating your investment objectives and their characteristics can you select the most appropriate option for yourself. Continue reading to discover more about the variations between the National Savings Certificate and fixed deposits. 

Overview of NSC Schemes

This is a fixed-income scheme backed by the government. It is designed for small to mid-income investors looking for long-term savings and secure returns. It comes with a 5-year lock-in period and a pre-determined interest rate. You can start investment with a nominal amount of ₹100. 

The following is the eligibility for NSC schemes, which you must know for comparison with FDs:

• Age: Anyone above 10 years of age can apply for this scheme
• Nationality: Any Indian citizen can apply  

The following entities cannot apply for NSC:

• Hindu Undivided Families (HUFs)
• Trusts
• Private and Public Limited Companies (PLCs)
• Non-Resident Indians (NRIs)

Eligibility for FDs

As you may know, it is a secure savings option that requires a lump sum investment. You can choose a preferred tenure according to which issuer gives you an interest rate. Most issuers charge a penalty on withdrawal before completion of tenure. Here’s a list of eligible entities who can book an FD:

• Residents
• Sole proprietorship firms, partnership firms and limited companies
• HUFs (Hindu Undivided Families)
• Trust accounts

NSC VS. Fixed Deposit

Here are the differences between NSC and FD schemes:

Topics	NSC	FD
Interest rate	7.7% at present	Varies between 2.50% and 9%
Compounding frequency	Yearly	Quarterly in general
Minimum Investment Amount	₹1,000	₹1,000 to ₹10,000, depending on the issuer
Maximum Investment Amount	No upper limit for investment	Depends on the bank or issuer, though most don’t.
Lock-in Period	Minimum 5 years	7 days to 10 years
Risk appetite	Low risk	Low to moderate risk
Tax Benefits	Qualifies for tax deduction under 80C	5-year tax-saver FDs offer 80C deduction
Premature Penalty	It has a penalty for premature withdrawal	Most banks impose penalties on premature withdrawals

A Comparative Study of NSC and FD with an Example

Assume you invested ₹1 lakh in an NSC and fixed deposit for 5 years. The following example shows your returns after 5 years. 

For National Savings Certificate:

• Capital: ₹1 lakh
• Tenure: 5 years
• Interest Rate: 7%
• Compounding frequency: Annually
• On maturity, the interest amount will be ₹40,255
• After claiming tax benefits, the maturity amount will be ₹1,40,255 

For fixed deposit, assume you have:

• Capital: ₹1 lakh
• Tenure: 5 years
• Interest Rate: 7% 
• Compounding frequency:  Quarterly
• The interest on maturity will be ₹41,478
• Maturity amount will be ₹1,41,478 (₹1 lakh + ₹41,478)

Note: The example above does not take the tax liability into account. Ensure you calculate your potential tax to calculate your actual returns. 

NSC or FD: Which is Better?

Both have their benefits and drawbacks, and here’s an overview to help you choose more efficiently.

• NSC: If you are looking for a long-term investment with a slightly higher return, then choose NSC schemes. This is a government-backed scheme, ideal for a low risk appetite. 
• FD: With a fixed deposit, you can potentially earn more with higher interest rates and have more flexibility in choosing the investment tenure. Alongside long-term investment options, you can also invest for short-term goals.

Based on your requirements, you can invest in NSC or a fixed deposit or both. 

Also Read: Term Deposit vs Fixed Deposit

FAQs on NSC vs Fixed Deposit

How is the tax treatment different for NSC and Fixed Deposits?

The interest in NSC schemes is reinvested through the lock-in period, so you only need to pay tax on the final year’s interest. Additionally, you can claim deductions under section 80C of the Income Tax Act. On the other hand, FD interests are considered earnings and are taxed as per your income tax slab. FDs also offer the same 80C benefit when you go for the five-year tax-saver option.

Which is better for long-term investment: NSC or Fixed Deposit?

The answer to this question completely depends on your investment objectives and post-tax returns. Usually, an FD is better if you want to invest for fewer than 5 years. If not, NSC may be a better option. Check your returns before you decide. 

Can I withdraw funds early from NSC and Fixed Deposits?

Premature withdrawal is simple when it comes to FDs, though an interest penalty applies in most cases. However, doing so is not easy in NSC, and it is only allowed in exceptional cases.

When it comes to risk-free investment, there are not a lot of options available that give outstanding returns. This is why it’s understandable why you may want help when comparing the features of FD vs PPF. These two lucrative options are not only secure but also suitable for long-term investment. 

Read on to get acquainted with their features and benefits to make a better selection between FD vs PPF. 

Guide to Public Provident Fund 

This savings scheme was established by the Ministry of Finance in 1968 and is supported by the government. It enables you to put your money in a non-market-dependent instrument for the long run to ensure your returns. Here are some of its features: 

• There is a 15-year lock-in period, and early withdrawals are allowed on meeting certain conditions
• The interest rates for this plan change every quarter 
• Right now, the rate is consistent at 7.1% annually for the third quarter of the 2024-25 
• It’s an optimal choice to grow your corpus for retirement or any other long-term goal

Guide to Fixed Deposit

Also called term deposit, this is a customisable investment option suitable for those with low-risk appetites. This is because its returns are not influenced by market fluctuations. Take note of its features for better understanding: 

• You need to invest a lump sum amount, which should be equal to or more than the minimum requirement of the financial institution
• You stay invested for a fixed tenure, between 7 days and 10 years, depending on your preference
• Banks, housing finance companies and non-banking financial companies offer variable interest rates for different tenures and principals 
• The rates beat the returns offered by savings accounts
• Apart from a few exceptions, you can withdraw money anytime, but you may need to pay a penalty, which decreases your total returns

Difference Between PPF and FD

Now that you have a basic understanding of these two savings options, here are some ways to compare FD vs PPF and make a decision:

Parameter	Public Provident Fund	Fixed Deposit
Eligibility Criteria	Anyone over the age of 18 years can open an account for self or a minor	Anyone over the age of 18 years can open an account, and guardians can open an account on a minor’s behalf
Interest Rate	The interest rate is set by the government and is subject to period revision; the current rate is 7.1% p.a.	Varies for all banks and financial companies and currently ranges between 2.50% to 9.00% p.a. with 0.25% to 0.75% additional rates for senior citizens
Liquidity	Low accessibility as you cannot withdraw your funds for at least 5 years and only partial withdraw after 5 years	Most financial institutions allow you to make premature withdrawals with a penalty of 0.5% to 1% or more on your total interest
Lock-in period	It comes with a lock-in period of 15 years	Tax-saving FDs have a lock-in period of 5 years
Maximum Tenure	You must stay invested for a 15-years to avoid  premature closure penalties	You can choose any tenure between 7 days to 10 years, depending on your investment goals
Minimum Investment	You can start with a minimum investment of ₹500	The minimum deposit amount varies and usually starts from ₹1,000
Maximum Investment	You can invest up to ₹1.5 lakh a year	There is no set maximum limit; it depends on the financial institution and may go up to crores
Taxation	It falls under the exempt-exempt-exempt (EEE) category, so you can enjoy tax benefits on investment as well as return and maturity amount	The interest attracts tax as per your slab as well as TDS of 10% if it’s over ₹40,000 for regular citizens and ₹50,000 for senior citizens, but you can claim a deduction on investments up to ₹1.5 lakh under Section 80C of the IT Act

Which is Better: PPF or FD

Although both options are dependable and safe, it is important to select the one that aligns with your investment goals and capability. 

• PPF is the right option if you can stay invested for a longer tenure or aim to grow funds for a long-term goal
• Fixed deposit is a better choice if you want flexibility, shorter tenure and higher liquidity

To plan for either of these, start by analysing your needs and compiling a list of the objectives you want to meet with your investment. Once done, you can compare FD vs PPF in terms of benefits, rules and restrictions, returns and other factors to choose the better option for yourself. 

FAQs on FD vs PPF

How is the maturity period different for FD and PPF?

For a fixed deposit, you can choose a tenure between 7 days and 10 years, depending on your financial goals. But for PPF, the maturity period is fixed at 15 years. You can reinvest for an added term of 5 years. 

What are the withdrawal rules for FD compared to PPF?

Most issuers allow you to make premature withdrawals before the tenure ends. However, you must pay an interest penalty which reduces your payout. With PPF, you cannot make any withdrawal before 5 years. 

What happens to FD and PPF upon the account holder’s death?

In both options, the nominee can claim the account after maturity.

Throughout the years, numerous new opportunities for investment have emerged that offer high returns. Nonetheless, there are limited alternatives that offer the same level of security as fixed deposits offered by banks and the Post Office. By comparing Post Office vs bank FD interest rates, you can opt for the best option as per your long- and short-term goals. 

With this investment, you don’t have to worry about the fluctuating market as both savings schemes preserve your capital and offer a fixed rate of interest. This is the reason why the popularity of bank and Post Office FDs remains evergreen, making them a reliable option for the risk averse. Read on to learn more about both options in detail.

Guide to Bank FDs

As the name suggests, when you open an FD account in a bank, it is called a bank FD. A fixed deposit requires you to invest at least the minimum specified by the financial institution in a lump sum for a chosen period. Once the tenure ends, you get the deposited amount, along with earned interest, which is usually credited to your bank account.

You can also choose to earn interest as regular payouts based on your needs and the frequency offered by the bank. This secure investment option gives better returns than a savings account. Here are the key features of a bank FD:

• Interest rates differ across banks and tenures
• Offers capital preservation
• Has flexible tenures
• Offers loan and overdraft facility
• Tax benefits when you choose a 5-year tax-saver FD 

What is a Post Office FD?

This fixed deposit, called the Post Office Time Deposit, shares some similarities to regular FDs. You can invest funds in your nearest post office for a certain period. You will receive your capital along with added interest at maturity. Since it is a government instrument, you get the advantage of the sovereign guarantee, which boosts your safety. 

Unlike the bank FDs, whose rates vary across institutions, you get a fixed interest rate on all post office fixed deposits in India. These interest rates only vary as per the tenure. Longer investment tenures have higher interest rates and vice versa. The following table shows the updated rates offered as of March 2024. 

FD Investment Tenure	Interest Rate
1 Year	6.9%
2 Years	7.0%
3 Years	7.1%
5 Years	7.5%

Disclaimer: These interest rates are current as of March 2024, but may be subject to change. Check the latest rates before you invest. 

Here are some other features of PO FDs:

• Anyone over 18 years of age can open individual or joint accounts for up to 3 adults
• Guardian can book FDs for minors over the age of 10 years
• You can start with a minimum deposit of ₹1,000 with the subsequent deposit in multiple of ₹100 with no upper limit
• You can get tax exemptions when booking a tax-saver FD for 5 years 
• The lock-in period is 6 months 
• If you prematurely withdraw your FD before 1 year, your interest will be reduced to the savings account rate offered by the post office

Post Office Fixed Deposit vs Bank Fixed Deposit

Here is a brief overview of the differences between these two options, so you can choose the ideal savings scheme:

Factors	Post Office FD	Bank FD
Interest Rates	Offers an interest rate of 6.9% to 7.5%	Offers interest between 2.50% pa to 9.00% p.a., based on the bank and tenure
Investment Ease	Requires a visit to your nearest  post office	You can visit your bank, use your bank’s mobile app or website to book the FD
Minimum and Maximum Required	You can get started with ₹1,000 without any maximum limit	The deposit limit varies from one bank to another and is usually ₹10,000
Rates for Senior Citizens	No added benefits for senior citizens	Banks offer 0.25% to 0.65% higher interest rates for senior citizens
Investment Timeline	You can invest for 1,2, 3 or 5 years	You can choose a comfortable tenure between 7 days and 10 years

Similarities Between Bank FD and Post Office FDs

Though there are a few differences, there are also similarities between these two secure investment options, such as:

• Premature Withdrawal Options: You can withdraw your money prematurely with an interest rate penalty 
• Tax Benefits: Both schemes are subjected to tax deductions under section 80C of the Income Tax Act for the investment amount; the interest earned on both is taxable as per your slab
• Risk Appetite: FDs, in general, are low-risk investment options
• Flexible Investment: Either option allows you to choose the tenure as per your flexibility and goals, though post offices have limited options as compared to bank
• Loan Facility: In case of emergency, you don’t need to withdraw your FD, as you can get a loan against both FDs 

FAQ on Post Office FD vs Bank FD

Post office FD or bank FD, which is better?

It can be a tough call to choose between these two; however, compare post office vs bank FD interest rates and tenures to make your decision.

Given the popularity of fixed deposits, many financial organisations have introduced their own corporate FDs. These include:

• HFCs (Housing Finance Companies)
• NBFCs (Non-Banking Financial Companies)

Their concept remains the same: you deposit your money for a certain term and get steady interest on your investment. While the plus point is that company FD rates may be higher than banks, the only fact to be cautious about is your exposure to risk. Read on to get clarity about investing money in such deposits. 

Guide to Corporate FDs

Just like banks, registered NBFCs and HFCs also offer fixed deposits to get access to funds and offer secure returns. Like regular FDs, you invest a significant amount for a fixed period at an agreed interest rate. These FDs are not as secure as they are not insured up to ₹5 lakhs by the DICGC (Deposit Insurance and Credit Guarantee Corporation) unlike FDs offered by banks. They are, however, lucrative options as corporate FD rates are relatively higher, which is why they offer better returns.

Key Features of a Corporate or Company FD

When you opt for a corporate FD, you can get significant returns. However, it is best not to opt for the first issuer you come across. Instead, look for these features when searching for the best organisation for your term deposit:

• Credit Rating

Corporate FDs come with a rating by recognised agencies like CRISIL, ICRA and CARE. These ratings show the credibility of the organisation. Thus, it’s best to choose the financial institution with the highest rating to reduce your risk and invest stress-free. 

• Interest Payment Options

Like banks, corporate FDs also have various interest payout options. You can sign up to receive your gains every month, quarter, year or twice a year. The rates you get differ based on the payout frequency you choose. 

• Premature Withdrawal

Most corporate FDs offer premature withdrawal after 3 months of tenure. However, this incurs penalties in terms of the interest rate applied to your deposit. 

In conclusion, to pick the best company fixed deposit, you must assess these important features:

• Credit rating
• Corporate FD interest rate
• Investment tenure
• Premature withdrawal charges
• Company reputation and track record

Also Read : Short Term FD vs Long Term FD

Latest Corporate FD Rates

Here are some top company fixed deposit interest rates that you can compare before proceeding: 

Corporate FD	Maximum FD interest rate for Regular Citizens	Maximum FD interest rate for Senior Citizens	Credit Rating
ICICI Home Finance	7.95% p.a.	8.20% p.a.	CRISIL AAA/CRISIL PPMLD AAA/Stable
LIC Housing Finance Ltd.	7.25%	7.50	CRISIL AAA/Stable
Mahindra Finance	8.05%	8.30	CRISIL AAA/Stable
Muthoot Capital Services Limited	9.91	10.41	CRISIL A+/Stable
PNB Housing Finance Ltd.	8.85	9.15	CRISIL AA+/Stable
Shriram Finance	9.40	9.90	CRISIL AA+/Stable
Sundaram Home Finance	7.90	8.25	CRISIL AAA/Stable

Disclaimer: These rates are current as of November 2024 and are subject to change. Please check the latest rates before you invest.

Similarities and Differences Between Corporate FD and FD Offered By Banks

To make an informed decision, check out the differences between these two options and invest based on returns, safety of your capital and ease of premature withdrawal. 

Parameters	Bank FD	Corporate FD
Potential Returns	Banks offer lower interest rates in comparison, which result in relatively lower returns	Corporate FD rates are relatively higher than bank FD rates, which offer higher returns
Risk Factor	These FDs are insured by the DICGC and are very safe	Corporate FDs have a relatively higher risk but you can check the FD rating before investing
Investment Tenure	Banks FDs may have a more extensive tenure, starting from 7 days to 10 years	Corporate FD tenures start from 6 months and can go up to 5 years in general
Premature Withdrawal	Your interest rate may be reduced by 0.5-2%	Your interest rate may incur a 2-3% penalty

While there are some differences, both types of FDs do share  certain similarities, such as:

• Capital Preservation and Guaranteed Returns

Both corporate and bank FDs keep your capital away from market forces and offer assured returns. This feature is the reason for the popularity of this investment option.

• Higher Interest Rates for Senior Citizens

Both bank FDs and corporate FDs offer interest rate hikes to senior citizens. This helps those over 60 to have a reliable savings option with the ability to choose monthly payouts to finance life post retirement. 

• Flexibility of Investment Tenure

In both cases, you can choose how long you want to stay invested. This gives you the flexibility to choose the tenure as per your financial goal. 

Now that you know how these deposits differ, you can choose the right one. To make the most of corporate FD rates, try staying invested for a longer tenure.

FAQS on Corporate Fixed Deposit Rates India

Is it possible for NRIs to invest in company fixed deposits?

Yes, NRIs can also invest in fixed deposits with NRE or NRO FDs.

A fixed deposit comes with a lot of benefits, acting as a lucrative tool to invest your savings securely while generating interest. In addition, it can also help you in arranging funds for financial emergencies or to build your credit score via a loan against FD or a secured credit card. Financial institutions also offer an overdraft against FD.  

This is an affordable alternative to getting a personal loan, which you can use without any restriction. By understanding what OD against FD means, you can compare options and choose the best one.  

What is OD against FD?

Having an FD account enables you to take different types of credits against it. One such option is an overdraft (OD) facility. Getting an overdraft on a fixed deposit requires you to pledge your FD, and the financial company will sanction 90% to 95% of your FD amount as credit.

To understand the process better, say you have an FD of ₹2 lakhs, and you need immediate funds. Instead of getting a loan, you apply for an overdraft facility where the bank is offering 90% of your fixed deposit as OD. Since 90% of ₹2 lakhs is ₹1.8 lakhs, you get the amount instantly without breaking your FD.  

This is a secured credit option where you will have to use your fixed deposit as collateral. However, unlike other secured loans, you don’t repay in full EMIs. It also does not attract interest on the total loan amount. Instead, you will have to pay interest only on the borrowed amount for the duration for which you are using the funds.  

Assume you have access to an overdraft of ₹1.8 lakhs, but you only used ₹1 lakh for 5 months. In this case, you only have to pay interest on ₹1 lakh for 5 months. Another noteworthy feature is that you can close your OD anytime without any prepayment charges. 

Who Can Apply for It?

To avail of this facility, you need to meet the following requirements:

• You must be the primary FD account holder
• The FD should meet the minimum amount criteria set by the bank
• The FD tenure should match the requirements of the financial institution 
• The FD will be marked with a lien
• Your KYC should be completed
• The FD should not already be pledged as security for another type of credit 

There are two types of deposits that are ineligible for OD: 

• A fixed deposit for a minor 
• A 5-year tax-saver FD

Loan Limit on Overdraft against FDs in India

When it comes to making the most of this facility, getting the maximum credit is valuable. Here’s a list of India’s most popular banks and their limit on overdraft against FD.

Bank	Overdraft Limit
State Bank of India	90% of the FD value
ICICI Bank	90% of the FD value
Bank of Baroda	90% of the FD value
Axis Bank	85% of the FD value
HDFC Bank	90% of the FD value
Citibank	90% of the FD value
Kotak Mahindra Bank	90% of the FD value
Yes Bank	90% of the FD value
Punjab National Bank	Minimum ₹25,000 to maximum ₹50 lakhs

Disclaimer: These details are current as of November 2024 and are subject to change as per the bank’s policy. Check the latest information before you apply for it.

How to Apply and Close Your OD against FD

To successfully apply for overdraft against FD, you can follow these steps: 

1. Open your internet banking
2. Log in with your credentials
3. Go to the ‘Fixed Deposit’ section
4. Select ‘Open OD against FD’
5. Enter your overdraft amount and other details  
6. Follow the instructions as mentioned on the dashboard 
7. Read and agree to the terms and conditions

For the offline application, visit the bank branch to fill out the form. After that, you must provide your fixed deposit receipt. On approval, the amount will be credited to your account.

The process doesn’t end here as you must also close your overdraft on a fixed deposit and remove the lien marking from your FD. For that, you need to follow these steps:

1. Repay the outstanding amount within the selected tenure
2. Check the final statement and confirm the outstanding balance is zero
3. Submit your closure request along with the mandatory documents
4. Wait for the bank to release the lien from your FD
5. Receive confirmation letter from the bank  

While this option is a quick and easy solution to get credit, read all the product details carefully, as you have to pay interest. If you are looking to book an FD, choose the financial institution offering maximum overdraft on a fixed deposit to put yourself in a better position to address an emergency.

FAQS on Overdraft against Fixed Deposit

Can I take an overdraft against a joint fixed deposit account?

Yes, you can take an overdraft against FD with joint account holders. There are only two limitations to this, which are:

• A minor fixed deposit account holder cannot get an OD
• 5-year tax-free FDs are not eligible 

What happens to my fixed deposit if I fail to repay the overdraft?

Initially, the lender will add interest to your fixed deposit. In case you still cannot pay the borrowed amount, the lender may have to take strict action leading to dissolving your FD to recover dues.

Using the fixed deposit monthly interest payout ensures financial stability and constant cash flow. Non-cumulative FDs allow you to reap these benefits. With periodic access to gains, you can get a second source of income while employed or during retirement. 

Read on to know what a monthly interest payout fixed deposit is, the rates of reputed banks, its perks and how to choose one. 

What is a Non-cumulative FD? 

To book an FD, you need to make a lump sum deposit and choose your preferred tenure and payout option. Once the tenure ends, you get the total deposit amount back. If you choose to get the payout every month instead of at the end of the tenure, non-cumulative FDs are the best option.

Most financial companies allow you to choose an FD with a monthly payout along with quarterly, bi-annual or annual payouts. Depending on your financial requirements, you can choose the required frequency.

How To Calculate Monthly Payouts

To calculate your monthly interest, banks use this formula:

P(1+R/N)^N*T

Here, P stands for the initial invested amount, R is the FD monthly interest rate, T is the total chosen tenure, and N is the frequency of the payout. For monthly payout, the frequency will be 12. With this formula, you will get the total interest earned on the deposit. After dividing the amount by 12, you will get the monthly earnings. 

However, keep in mind that the rates for monthly payouts are different in comparison to those for annual payouts or those applied to cumulative deposits. The best way to proceed is to use the FD interest calculator on the issuer’s website or mobile app. For instance, say you plan to invest ₹1,00,000. 

FD Monthly Interest Rate	Tenure (in months)	Monthly Interest Earnings (in ₹)	Total Interest Earnings (in ₹)
6.70%	12	555	6,663
7.25%	18	601	9,028

Disclaimer: These results have been generated using an online FD calculator and are for illustrative purposes only. 

As you can see, the rate for monthly interest for 12 months is 6.70% and the rate of investing for 18 months is higher at 7.25%. Based on this, you can see your monthly earnings and compare them to take the right call. An FD calculator is digital and offers instant and accurate results that help you decide better. 

By choosing the senior citizen tab on the FD calculator, you can also check if the monthly FD interest for seniors is higher. Taking the same example as above of investing ₹1,00,000 in an FD with monthly payouts, check out what you may earn:

FD Monthly Interest Rate	Tenure (in months)	Monthly Interest Earnings (in ₹)	Total Interest Earnings (in ₹)
7.20%	12	596	7,157
7.75%	18	642	11,550

Disclaimer: These results have been generated using an online FD calculator and are for illustrative purposes only. 

As you can see, you can increase your monthly gains by investing for a longer time frame. Use this calculator to forecast your gains before you finalise your investment. 

Also Read: Short Term FD vs Long Term FD

Advantages of Monthly FD Payout 

When you choose an FD with a monthly payout, you get access to your returns every month. Considering that, here are some benefits you can enjoy:

• Additional Funds

With non-cumulative FDs, you get an extra source of income. Since the FD interest rate is better than the rate offered by a savings account, you can earn well and put your surplus funds to good use. 

• Cash Flow Flexibility

The monthly FD interest you earn can increase your purchasing power, giving you better cash flow. This is an ideal option to get passive income and elevate your lifestyle.

• Reinvestment 

With the monthly interest, you can start a new investment. If you have a loan, you can also use this money to pay your EMIs. 

• Retirement Financing 

With a lump sum deposit, you secure your golden years by using it to finance your daily living and medical expenses.  

• Predictable Income Source

With this type of FD, you get a fixed monthly return. Thus, you can easily manage your budget to meet fixed obligations. This way, you are not dependent on your savings or job and reduce the risk of premature withdrawal. 

FAQs on Fixed Deposit Monthly Interest

Is there a minimum deposit amount required to receive monthly interest payouts?

Yes, most banks have a minimum investment amount whether you want to book a fixed deposit with monthly interest payout or receive the gains at maturity. 

Is the monthly interest guaranteed regardless of changes in interest rates?

Yes, the monthly FD plan gives you a fixed income throughout the chosen tenure. During this time, your interest rate remains the same as FD rates are not linked to the market. 

Can I change my payout frequency from monthly to yearly after the FD is opened?

Some banks allow you to switch from monthly payout to other options. However, it is important that you clarify this before making the deposit or by reading the terms and conditions.