A fixed deposit (FD) is a popular method of saving money used by risk-averse investors. FDs give assured returns after a predetermined period of time and the investor can calculate beforehand the total maturity amount that will be received by them. The interest rates offered by each bank, NBFC and post office are varied and determined by factors such as prevailing FD interest rates. The interest earned on the fixed deposit compounds over time. This compounding effect ensures attractive rates of interest on fixed deposits.

Best FD interest rates

A good rate of interest on a fixed deposit of three years is offered. Three-year fixed deposits yield much higher interest rates than one or two-year tenures. Here are the most attractive interest rates offered by various banks in 2021 for a three-year tenure-

Bank Regular interest Senior citizen interest
Bajaj Finance 6.50% 6.75%
Shriram City 8.84% 9.24%
Yes Bank (special rates) 6.50% 7.00%
Fincare Small Finance Bank 6.30% 6.80%
Mahindra Finance 6.30% 6.55%
Sundaram Finance 6.25% 6.75%
KTDFC 6.00% 6.25%
ICICI Home Finance 5.55% 5.80%
ICICI Bank 5.15% 5.65%

The total amount that you will receive upon the maturity of your FD depends on the interest payout selected by you. If you choose the monthly, quarterly or annual payout options, the FD amount will be credited to your savings account. In the case of the reinvestment option, your interest will be compounded with them and credited to your bank account along with the principal invested when the FD matures.


A fixed deposit is a sought after investment device as it provides assured returns irrespective of the economy. There is a sense of surety that the total amount will be returned to you upon maturity with interest. In fact, the use of compound interest ensures faster growth. For senior citizens, FDs are a safe and attractive option because Senior Citizen FD rates are higher.

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