Fixed deposit is one of the more sought-after investment instruments in India. Indian parents start teaching the value of money to their kids from childhood. They also try to impart the culture of savings and investment among their children with the help of piggy banks.
Traditionally, fixed deposit schemes have been the centre of investor's attraction. The main reason for this is the consistent return on investment and low associated risk to the investment.
This article covers all the information regarding fixed deposit current interest rate. But let us start with the basic features of an FD. And what affects the FD interest rates in India.
Essential Features of an FD
- Fixed Income: The income generated by a fixed deposit scheme is predefined. Hence, you know with certainty the maturity value at the end of the tenure.
- Flexible Tenure Options: FDs are available across a wide range of tenures — from short-term deposits to longer-term options, depending on institutional policy.
- Reliable Investment: Unlike equities or mutual funds, FD returns are not directly affected by daily market movements. However, credit risk may vary depending on the issuer.
- Compound Interest: You can calculate the interest on a fixed deposit scheme with a compounding effect. Hence, you can reinvest the interest earned on an FD with the principal.
Let us now look at the calculation of fixed deposit interest.
How is Interest Calculated on a Fixed Deposit Scheme?
Interest on a Fixed Deposit is typically calculated on a compounding basis, depending on the scheme selected. Therefore, you can reinvest the interest that you earn every three months. Your principal gets increased, and you start making interest on this amount. Let us understand the compounding effect with the help of a simple example.
Suppose you invest Rs. 1,00,000 for one year at an interest rate of 10%* p.a. Now, the simple interest on this amount would be Rs. 10,000 for one year. At the same time, what would compounding the interest do to this investment?
Here, you must have observed that compound interest always exceeds the simple interest if the interest rates are the same. With this being established, let us look at the prevailing FD interest rates.
Fixed Deposit Interest Rates
FD interest rates vary based on tenure, institution, and prevailing economic conditions. Changes in the RBI’s repo rate and overall liquidity conditions influence how financial institutions price their deposits.
Over time, interest rate cycles have shifted — with periods of higher rates followed by phases of moderation. As a result, FD rates offered today may differ significantly from those available a decade ago.
Banks and NBFCs may offer different interest structures depending on their funding needs, credit profile, and tenure options. Investors should compare:
- Interest rates across tenures
- Credit ratings of the issuer
- Liquidity terms
- Additional benefits for senior citizens or renewals
Why should You Choose Shriram Finance?
Attractive Interest Rates
Shriram Finance offers attractive interest rates up to 8.15%* p.a., inclusive of an additional 0.50%* p.a. for senior citizens and additional 0.05%* p.a. for women depositors.
Flexible Tenure
You can create FDs for a flexible tenure of 12–60 months with Shriram Finance. Premature withdrawal may be permitted, subject to applicable conditions and interest recalculation as per policy.
Cumulative & Non-Cumulative FDs:
You can choose from both of these products as per your requirements.
- Cumulative FDs: These do not pay out regular interests. You can reinvest the accrued interest as a part of the principal. With more frequent compounding, you can expect an increased return on investment.
- Non-cumulative FDs: In these types of FDs, you receive in payment the interest accrued at regular intervals. Shriram Finance provides flexible interest frequency with monthly, quarterly, half-yearly, and yearly interest payouts.
Invest Online within minutes
You can invest in fixed deposit with Shriram Finance by following simple steps.
- Step 1: Register using your mobile number.
- Step 2: Enter the investment amount, select the tenure, and provide your PAN details.
- Step 3: Complete your KYC verification and submit depositor details along with required declarations.
- Step 4: Verify your bank account details.
- Step 5: Add nominee details and complete the payment online.
- Step 6: Download your Fixed Deposit certificate upon successful confirmation.
Final Words
You should select the fixed deposit scheme that matches your investment objectives. Evaluate interest rates, tenure flexibility, credit rating, and liquidity terms before making a decision. Click here to kick-start your investment journey with Shriram Finance.