Invest in Higher Interest Rates on FDs: Compare Interest Rate Variations Among Banks Including HDFC and Axis

HDFC, Axis Bank, Bank of India, and ICICI Bank, among other major banks, have recently raised their fixed deposit (FD) interest rates. If you are considering opening an FD these days, you should know about the new interest rates offered by these banks.

We are informing you that banks are offering different interest rates on FDs of less than 3 crores. Therefore, you can deposit your savings according to your convenience.

Fixed Deposit Interest Rates for Different Tenures (Per Annum)

1-Year FD Interest Rates:

  • HDFC: 6.60%
  • ICICI: 6.70%
  • Axis Bank: 6.70%
  • Punjab National Bank: 6.75%
  • SBI: 6.80%
  • Bank of India: 6.80%

2-Year FD Interest Rates:

  • Bank of India: 6.80%
  • Punjab National Bank: 6.80%
  • SBI: 7.00%
  • HDFC: 7.00%
  • Axis Bank: 7.10%
  • ICICI: 7.20%

3-Year FD Interest Rates:

  • Bank of India: 6.50%
  • SBI: 6.75%
  • Punjab National Bank: 7.00%
  • ICICI: 7.00%
  • HDFC: 7.00%
  • Axis Bank: 7.10%

5-Year FD Interest Rates:

  • Bank of India: 6.00%
  • Punjab National Bank: 6.50%
  • SBI: 6.50%
  • HDFC: 7.00%
  • ICICI: 7.00%
  • Axis Bank: 7.00%

Taxation on Fixed Deposits (FDs)

Interest earned from FDs is fully taxable. The interest you earn annually on your FD is added to your total income for the year. Depending on your total income, your tax slab is determined. Since the income from FD interest is considered “income from other sources,” tax is deducted at source (TDS) either by the bank or through TDS on interest income.

Here are some key points to consider regarding TDS on FD interest:

  • Below ₹2.5 lakh Annual Income: If your total annual income is less than ₹2.5 lakh, banks do not deduct TDS on your FD interest. However, you may need to submit Form 15G or 15H to the bank to claim exemption from TDS.
  • Income Between ₹2.5 lakh to ₹5 lakh: If your total income exceeds ₹2.5 lakh but is less than ₹5 lakh, no TDS is deducted on FD interest. Ensure to declare your interest income while filing your income tax returns.
  • TDS Rates Above ₹5 lakh Annual Income: For FD interest income exceeding ₹40,000 annually, banks deduct TDS at the rate of 10%. If you do not provide your PAN card details, banks may deduct TDS at a higher rate of 20%.
  • Senior Citizens: For senior citizens aged 60 years and above, TDS is applicable on FD interest income exceeding ₹50,000 annually. The TDS rate is 10% if the total income is below the taxable limit.
  • Claiming TDS Refund: If TDS has been deducted by the bank on your FD interest and your total income is below the taxable limit, you can claim a refund while filing your income tax return. This amount will be credited to your bank account.

Ensure to consider these points regarding TDS while managing your FD investments and tax liabilities.

Akash Shrivastav

My name is Akash Shrivastav, and I am a Blogger. I have 8 years of experience in blogging for Finance, Business, Investment, Stock Market, Cryptocurreny and more. Through my writing, I aim to provide readers with insightful and informative content.