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Best 5 Fixed Deposit Schemes for 1 year

Updated on: 29 Jan 2024 | 5 min read

Are you looking for a safe and reliable investment option for 1 year? Then you should delve into these top 5 Fixed Deposit (FD) options. These FDs offer diverse features and advantages, ensuring promising future returns and financial stability. For more details, let's read the blog to find the most suitable option.

What is a Fixed Deposit?

Fixed Deposit (FD), also known as Term Deposit, is an investment avenue available through banks and financial institutions. Here, the depositor deposits the lump sum of money in the bank account for a fixed period of tenure and bank/financial institutions give interest on the same. FD offers higher interest rates than saving accounts and comes with various features such as loans against FD, Overdraft facilities, premature withdrawals, credit cards against FD, etc. Commonly preferred, FDs provide a reliable means to secure savings and earn predictable returns on investments.

Key FD Features for 1-year Tenure

  • FDs have a fixed tenure, which can range from a few months to several years. You can choose a tenure that suits your investment goals at the time of opening an FD.
  • One of the key features of an FD is that it offers a fixed rate of interest for the entire duration of the investment. 
  • Banks and financial institutions have a minimum investment amount for FDs. This can vary from bank to bank and can be as low as a hundred rupees.
  • At the end of the tenure, you can choose to renew the FD for another term or withdraw the investment.
  • The interest earned on FDs is taxable as per the Income-tax Act,1961 (The Act). However, senior citizens can avail of higher interest rates and tax exemptions on the interest earned.
  • In case of urgent need of funds, the investor can avail loan against FD. 
  • FDs allow you to nominate a person who will receive the investment and interest in case of your untimely demise.
  • Some FDs have a lock-in period, during which you cannot withdraw your investment without incurring a penalty.
  • However, most banks and financial institutions allow premature withdrawal in case of an emergency.

Best FD Interest Rates with a 1-year Tenure

S.NoName of Bank/NBFCInterest Rate for General CitizensInterest Rate for Senior Citizens
1.DCB Bank7.15%7.65%
2.Karur Vysya Bank7.00%7.40%
3.Karnataka Bank6.95%7.35%
4.Canara Bank6.85%7.35%
5.Punjab National Bank6.75%7.25%

List of Best FD Schemes for 1 Year

DCB Bank

  • Introduction: DCB Bank, a modern private sector bank, boasts 439 branches throughout India, regulated by the Reserve Bank of India. With a customer base exceeding a million, it operates in various segments, including Retail, micro-SME, and Agriculture. The bank, backed by contemporary technology, offers Internet banking and caters to diverse sectors like Government, Co-operative Banks, and NBFCs. Established in the 1930s, it's supported by the Aga Khan Fund for Economic Development (AKFED) promoting entrepreneurial ventures worldwide.
  • Feature: The bank provides an attractive interest rate with higher interest rates for senior citizens. There is a flexible interest payment option. The tenure of FD ranges from 7 days to 10 years. Auto renewal facility with the facility of loan against FD and overdraft against FD is also available. 
  • Interest Rate: The interest rate for non-senior citizens is 7.15% and for senior citizens is 7.65%.
  • Minimum and Maximum Deposit: The minimum deposit is ₹ 10,000/- and there is no maximum limit.

 

Karur Vysya Bank

  • Introduction: Karur Vysya Bank (KVB) is a leading commercial bank having approximately 800 branches. The bank started from a small town in Tamil Nadu in 1916 and has now spread its wings across 20 states and 3 Union Territories. KVB is one of the highest fixed deposit interest providers amongst other commercial banks. This article provides more insights on various Fixed Deposit options provided by KVB.
  • Feature: Karur Vysya Bank's FD scheme suits those seeking regular interest payouts, available monthly, quarterly, or semi-annually. However, note it offers simple interest. With tenures from 15 days to 10 years, there is a minimum deposit limit of ₹100/-. The deposit accommodates loans, nominations, and premature closures based on terms. Individuals, HUF, Trusts, Partnerships, Companies, and Associations are eligible to invest.
  • Interest Rate: The interest rate for non-senior citizens is 7.00%, and for senior citizens is 7.40%.
  • Minimum and Maximum Deposit: The minimum deposit is ₹ 100/- and there is no maximum limit.

 

Karnataka Bank

  • Introduction: Karnataka Bank Limited is a prominent 'A' Class Scheduled Commercial Bank in India, established on February 18, 1924, in Mangaluru, a coastal town in the Dakshina Kannada district of Karnataka State. The bank originated during the freedom movement of 20th Century India, reflecting the patriotic zeal that swept the nation. Over time, the Bank has expanded with the amalgamation of Sringeri Sharada Bank Ltd., Chitradurga Bank Ltd., and Bank of Karnataka. Presently, the bank has a pan-India presence, with a branch network of 901 situated across 22 states and 2 Union Territories.
  • Feature: The Karnataka Bank FD is available for 7 days to 120 months with a minimum deposit of ₹ 100/-. The depositor can choose interest payout frequency as per their need. The bank provides the facility for premature withdrawal with a nomination facility. 
  • Interest Rate: The interest rate for non-senior citizens is 6.95% and for senior citizens is 7.35%.
  • Minimum and Maximum Deposit: The minimum deposit is ₹ 100/- and there is no maximum limit.

 

Canara Bank

  • Introduction: Canara Bank is one of the oldest banks operating in India, and it was nationalised in the year 1969 till today they are serving their customers with good banking experiences. Canara Bank provides their customers 24x7 and 365 days services with the help of net banking even on holidays, users can transfer funds and avail of another banking service without visiting the branch. This service can be activated without any cost and can be availed by Canara bank account holders. Now, let us discuss in detail Canara Bank’s net banking features, registration, login and other varied things.
  • Feature: The bank provides an attractive interest rate with higher interest rates for senior citizens. There is a flexible interest payment option. The tenure of FD ranges from 7 days to 10 years. Up to 90% loan facility is available. Auto renewal facility with the facility of loan against FD is available. Premature closure is allowed, subject to terms and conditions. 
  • Interest Rate: The interest rate for non-senior citizens is 6.85% and for senior citizens is 7.35%.
  • Minimum and Maximum Deposit: The minimum deposit is ₹ 1,000/- and there is no maximum limit.

 

Punjab National Bank

  • Introduction: Punjab National Bank (PNB) commenced its operations on 12 April 1895 from Lahore with an authorised capital of ₹ 2 Lakh and working capital of ₹ 20,000. The Bank was established in the spirit of nationalism and was the first bank purely managed by Indians with Indian Capital. During the long history of PNB, 9 banks have been merged/ amalgamated with PNB. As of the end of December 2022, the bank has a total of 45,613 delivery channels with a network of 10,049 domestic branches, 2 International branches, 12957 ATMs & 22607 Business Correspondents.
  • Feature: PNB allows premature withdrawal on all FDs except tax-saving ones, subject to a 1% penalty on the interest. Nomination facilities are available, and investors can opt for auto-renewal. Deposits in PNB are covered by the RBI's Deposit Insurance Scheme up to ₹ 5,00,000. Once an FD has started, no additional deposits are allowed, but investors can initiate a new FD with fresh funds at Punjab National Bank. 
  • Interest Rate: The interest rate for non-senior citizens is 6.75%, and for senior citizens is 7.25%.
  • Minimum and Maximum Deposit: The minimum deposit is ₹ 100/- and there is no maximum limit.

Final Words

Fixed Deposits (FDs) stand out as a trusted choice for many Indians seeking a stable source of income. Choosing the ideal FD scheme for a one-year term involves considering interest rates, tenure flexibility, liquidity, and perks. The top five analysed schemes present diverse benefits, catering to varied investor preferences. Whether prioritising high-interest rates, flexible terms, or personalised needs, these schemes offer a range of options, aiding investors in aligning choices with their financial objectives.

FAQs

Can I open an FD online?

Yes, you can open the FD online either by using a banking app or internet banking.

Can I renew my Fixed Deposit?

Yes, FD can be renewed either by using an auto-renewal facility or by instructing the bank to renew the FD. But FD cannot be renewed after the maximum period.

Can I break my FD before maturity?

Yes, you can break the FD before maturity, but you have to pay a premature withdrawal penalty.

What is the minimum amount I need to open an FD for 1 year?

The minimum amount to open an FD varies from bank to bank; it starts from ₹ 100/- and goes to ₹ 10,000/- for some banks.

Can NRI open FD for 1 year?

Yes, NRIs can open an NRE FD account for 1 year.

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