Fixed Deposit FAQ

Your fixed deposit questions, answered.

What is a fixed deposit (FD)?
A fixed deposit is a deposit where you lock a lump sum with a bank for a chosen tenure (typically 7 days to 10 years) at an interest rate fixed for that term. As of 14 Nov 2026, the highest general FD rate we track is 10.00% at Mudalagi Co-operative Bank Ltd.. You can compare the best FD rates across India's banks here.
How is FD interest calculated and compounded?
Most Indian banks compound FD interest quarterly. For a cumulative FD the interest is reinvested and paid with the principal at maturity; for a non-cumulative FD it is paid out monthly, quarterly, half-yearly or annually. Use our FD maturity calculator to see the exact maturity value for any rate, tenure and compounding frequency.
Are fixed deposits safe? What is DICGC insurance?

Deposits with RBI-licensed banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5,00,000 per depositor per bank, covering principal plus interest. If you hold more than ₹5 lakh, spreading it across banks keeps the whole amount insured.

Is FD interest taxable? When is TDS deducted?

Yes. FD interest is fully taxable as 'income from other sources' at your income-tax slab rate. Banks deduct TDS at 10% (20% without PAN) once your interest from that bank crosses ₹40,000 in a financial year (₹50,000 for senior citizens). Submit Form 15G (under 60) or Form 15H (60+) if your total income is below the taxable limit to avoid TDS.

Is there a lock-in period on a fixed deposit? Can I withdraw before maturity?

A regular fixed deposit has no lock-in beyond the tenure you choose, and you can usually break it early. Most banks levy a premature-withdrawal penalty of about 0.5%–1% on the applicable rate and pay interest only for the period the deposit actually stayed; some banks offer no-penalty or sweep-in FDs. The main exception is a tax-saver FD, which is locked in for 5 years, and some special or bulk deposits don't allow early withdrawal at all. Check the specific scheme terms before booking.

Do senior citizens get higher FD rates?
Yes. Banks typically add 0.25%–0.75% p.a. over the general rate for depositors aged 60 and above, and some run special super-senior (80+) rates. See the best senior citizen FD rates.

Informational only. Always confirm the current rate and terms on the bank's official website before investing. See how we compile and verify rates in our methodology.