If you are considering a one-year Fixed Deposit (FD), do you know what kind of returns you might get? Interest rates vary from bank to bank. Let’s explore which banks offer the best returns on a deposit of ₹1 lakh.

Many people opt for Fixed Deposits (FDs) to secure their financial future. In an FD, a lump sum is deposited into a bank account, and the bank pays interest on that amount. However, interest rates differ across banks. If you are planning to open a one-year FD for ₹1 lakh, you will find that different banks offer different interest rates.

According to a report by The Economic Times, some small finance banks are offering interest rates of up to 7.25% on one-year FDs. In contrast, major banks like SBI, HDFC, and ICICI offer lower rates.

Which bank offers what interest rate?

If you are thinking of opening an FD for ₹1 lakh, let’s look at the interest rates offered by various small finance banks, private banks, and public sector banks. These details are based on current interest rates and estimated maturity amounts.

Small Finance Banks

Private Banks

Public Sector Banks

Things to keep in mind before opening an FD

You shouldn't just open a Fixed Deposit (FD) without careful consideration; there are several important factors to keep in mind. For instance, do not choose a bank solely based on a higher interest rate. Also, consider the tax implications, as the interest earned on an FD can affect your tax liability. Be sure to read all the terms and conditions carefully—paying particular attention to the rules regarding premature withdrawal.