Which bank offers the highest FD rate in India 2026?

Among major banks, small finance banks like AU Small Finance, ESAF, and Jana Bank offer 8-9% FD rates as of 2026, while major PSU banks (SBI, PNB) offer 6.7-7.25%. Kotak and IDFC First Bank typically offer 7-7.5%. Remember: FDs in small finance banks are also insured up to ₹5 lakh under DICGC, so they're safe for amounts within that limit.

How is FD interest calculated in India?

Most banks compound FD interest quarterly: Maturity = P × (1 + r/4)^(4×t). For a ₹1 lakh FD at 7% for 1 year: Maturity = 1,00,000 × (1.0175)^4 = ₹1,07,186. This gives an effective yield of 7.19% (higher than 7% due to quarterly compounding). Some banks compound monthly, which gives slightly higher returns.

Is FD interest taxable in India?

Yes, FD interest is fully taxable as per your income tax slab every year (even if you haven't withdrawn). Banks deduct TDS at 10% if interest exceeds ₹40,000/year (₹50,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G (non-senior) or Form 15H (senior citizen) at the start of each financial year to avoid TDS deduction.

What are senior citizen FD interest rates?

Senior citizens (age 60+) get 0.25% to 0.50% higher FD interest rates at most banks. SBI offers 0.50% extra (becoming 7.50% on 1-year FD vs 7.00% for regular). HDFC Bank offers 0.50% extra. Some banks like AU Small Finance Bank offer up to 0.75% extra for senior citizens. This can make a significant Rs 5,000-25,000 difference on a ₹10 lakh FD.

Can I break an FD before maturity?

Yes, premature FD withdrawal is allowed at most banks. Penalty is typically 0.5-1% reduction in interest rate. Example: For a 2-year FD at 7%, premature withdrawal before 1 year might only earn 6% (1% penalty). Some bank FDs have a lock-in period (e.g., 5-year tax-saving FDs cannot be broken before 5 years). Online FDs generally allow instant premature closure.

Which is better: FD or Liquid Mutual Fund?

For periods under 3 years: Liquid funds and ultra-short debt funds typically offer 6.5-7.5% with better liquidity (T+1 withdrawal) vs FD's penalty for early exit. FD is better for: guaranteed returns, no NAV risk, DICGC insurance. Liquid funds are better for: emergency funds needing instant access, slightly higher post-tax returns for higher tax bracket investors. For amounts over ₹5 lakh in one bank, liquid funds also avoid concentration risk.

HDFC Bank FD Interest for ₹35 Lakh — 2026 Maturity Value & Rates

Investing ₹35 Lakh in HDFC Bank FD is a stable way to preserve capital while earning guaranteed returns. As India's largest private sector bank, HDFC offers competitive interest rates, especially for 'bulk' deposits or specific tenure buckets. For a ₹35 Lakh investment, even a 0.5% difference in interest rates can significantly impact your final maturity amount. Our HDFC ₹35 Lakh FD Calculator helps you determine the exact interest you'll earn. We account for quarterly compounding, which is the standard for most HDFC term deposits. Whether you are looking for short-term liquidity or long-term growth, this tool provides a clear breakdown.

How Does the FD Calculator Work?

FD interest is typically compounded quarterly by most Indian banks. The calculator applies the compound interest formula to compute your exact maturity amount. Note: The effective annual yield (EAY) is slightly higher than the stated rate due to quarterly compounding — for example, a 7% FD compounded quarterly effectively yields 7.19% annually.

A = P × (1 + r/n)^(n×t)

Where:

• A = Maturity Amount
• P = Principal deposit amount
• r = Annual interest rate (as decimal, e.g. 0.07 for 7%)
• n = Compounding frequency (4 = quarterly, 12 = monthly)
• t = Tenure in years
• Example: ₹1,00,000 @ 7.5% for 2 years (quarterly) → A = 1,00,000 × (1.01875)^8 = ₹1,16,015

Quarterly Compounding: Most banks compound quarterly. ₹1 lakh at 7% for 1 year → ₹1,07,185 (not ₹1,07,000 from simple interest).
Senior Citizen Advantage: Banks offer 0.25–0.50% higher FD rates for senior citizens (above 60 years). Always check senior citizen rates if applicable.
TDS Deduction: Banks deduct 10% TDS if your annual FD interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H to avoid TDS if your total income is below the taxable limit.
Cumulative vs Non-Cumulative: Cumulative FD pays interest at maturity (better for growth). Non-cumulative FD pays monthly/quarterly (better for regular income needs).

Example: ₹5 Lakh FD for 2 Years

Priya deposits ₹5,00,000 in an SBI FD for 2 years at 7.1% p.a. compounded quarterly.

• Maturity Amount: ₹5,74,898
• Total Interest Earned: ₹74,898
• Effective Annual Yield: 7.31%

Same amount in a senior citizen FD at 7.6%: Maturity = ₹5,80,361 (₹5,463 more just from the 0.5% senior citizen bonus!)

Principal: ₹5,00,000

Rate: 7.1% p.a. (quarterly)

Tenure: 2 Years

Maturity Value: ₹5,74,898

Interest Earned: ₹74,898

Current FD Rates by Bank (Jan 2026) — General & Senior Citizen

Compare FD interest rates across major Indian banks for a 1-2 year tenure:

Bank	1 Year FD Rate	2 Year FD Rate	Senior Citizen Extra	Max Tenure
SBI	6.80%	7.00%	+0.50%	10 Years
HDFC Bank	6.60%	7.00%	+0.50%	10 Years
ICICI Bank	6.70%	7.00%	+0.50%	10 Years
Kotak Mahindra	7.10%	7.25%	+0.50%	10 Years
Post Office TD	6.90%	7.00%	No extra	5 Years

Frequently Asked Questions

⚠️ Disclaimer

The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.

HDFC Bank FD Interest for ₹35 Lakh — 2026 Maturity Value & Rates | StockCalc.in

FD Maturity Breakdown

Interest Comparison

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