Fixed Deposit (FD) in India: Latest Interest Rates September 2025, Calculator, Types, Tax & FAQs

Explore Fixed Deposits (FD) in India: latest FD interest rates for September 2025, bank vs NBFC vs Post Office FDs, tax-saving options, DICGC safety, types, and FAQs. Compare top rates and learn how to choose the right FD for short- and long-term goals.

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Fixed Deposit (FD) in India: Latest Interest Rates September 2025, Types, Safety, Tax and FAQs

Fixed deposits (FDs) are time-bound savings offering fixed returns and principal protection, making them popular for conservative investors and short-term goals. This guide compares current rates, clarifies DICGC safety, explains FD types, and shows how to choose, open, and manage FDs in September 2025

What is a Fixed Deposit?

A fixed deposit (FD) is a term deposit where funds are locked for a chosen tenure at a predetermined interest rate, with payouts either periodically or at maturity. It prioritizes income certainty and capital protection across banks, SFBs, NBFCs and the Post Office.

Latest FD Interest Rates in September 2025

Indicatively, public FD rates span roughly from about 2.5% p.a. to about 8.5% p.a., with the upper range typically offered by Small Finance Banks and select NBFC/HFC corporate deposits. Large private and PSU banks usually quote mid‑6% ranges on mainstream tenors.

Examples for context (general citizen rates; check issuer before booking):

Axis Bank: selected tenors around 6.25%–6.60% for 1–2 years; senior variants higher.

ICICI Bank: up to about 6.60% for general citizens; up to about 7.10% for seniors.

HDFC Bank: grid commonly shows mid‑6% ranges on 1–5 year buckets for general citizens.

IDFC FIRST Bank: select slabs like 7.00% for 450 days–2 years; other tenors vary.

Always verify rate at booking; special windows and non‑callable variants can change yields.

Post Office FD (Time Deposit) Rates (effective till 30 Sept 2025)

1 year: 6.90% p.a.

2 years: 7.00% p.a.

3 years: 7.10% p.a.

5 years: 7.50% p.a.

Senior Citizen and Super Senior Benefits

Most banks offer +0.50% p.a. over public card rates for senior citizens; some add extra boosts for special tenors.

Super senior add-ons in select banks can reach around +0.75% to +1.00% for certain longer tenors. Always confirm tenor eligibility.

Types of Fixed Deposits

Standard FD: Fixed rate, 7 days to 10 years, typically higher than savings rate.

Tax-Saving FD: 5-year lock-in; principal up to ₹1.5 lakh eligible under Section 80C; interest is taxable.

Floating Rate FD: Linked to reference benchmarks (e.g., repo, T-bills).

Flexi/Sweep FD: Linked to savings/current account; partial sweep-out when balance is short.

Cumulative vs Non‑Cumulative: Compounding at maturity versus monthly/quarterly/half‑yearly/annual payouts.

Callable vs Non‑Callable: Non‑callable usually pays more but cannot be closed prematurely.

NRI FDs (NRE/NRO/FCNR/RFC): Currency, tax, and repatriation rules differ; check bank specifics.

FD Safety: DICGC Insurance

Deposits with insured banks are covered up to ₹5 lakh per depositor per bank, including principal and accrued interest.

Coverage applies across savings, current, recurring, and fixed deposits at insured banks; NBFC corporate FDs are not covered by DICGC. Verify insured bank status.

How to Choose the Right FD

Match tenor to goals and liquidity; compare bank/SFB/NBFC/Post Office rates and features like sweep, overdraft, and non‑callable uplift.

Consider issuer safety; for corporate FDs, review ratings. Factor senior add-ons and payout mode (compounding vs income).

How to Open FD: Online & Offline

Existing customers can book via net banking or mobile apps; some offer one‑tap flows.

New customers can visit branches or partners with standard KYC (Aadhaar, PAN, address proof, photo).

Taxation, TDS and 80C

Principal in 5‑year tax-saving FDs qualifies up to ₹1.5 lakh under Section 80C; interest is taxed per slab.

TDS generally applies when annual interest exceeds ₹40,000 for individuals and ₹50,000 for seniors (with PAN); Form 15G/15H can apply subject to eligibility.

FD as Collateral: Loans & Secured Credit Cards

Overdraft/loan against FD offers liquidity without breaking the deposit; interest charged only on drawn amount while FD continues to earn.

Secured credit cards against FD help build or repair credit via reported repayment behavior.

FAQs

What are the latest FD interest rates in September 2025?

Indicatively ~2.5% p.a. to ~8.5% p.a., with SFBs and select NBFC/HFCs at the upper end; large private/PSU banks typically range ~6.25%–6.75% for mainstream tenors. Verify issuer’s latest grid.

Are FDs safe and insured?

Bank deposits are insured by DICGC up to ₹5 lakh per depositor per bank (principal + interest); NBFC corporate FDs are not covered.

How do senior citizen FD rates work?

Seniors generally get +0.50% p.a. over card rates; some special tenors offer extra top‑ups or super-senior boosts.

What is a tax‑saving FD and its lock‑in?

A 5‑year FD with principal eligible for 80C deduction up to ₹1.5 lakh; interest is taxable and premature closure is not allowed.

Can an FD be closed before maturity?

Callable FDs allow premature closure, typically with a penalty; non‑callable FDs cannot be closed early but pay higher rates.

What are cumulative vs non‑cumulative FDs?

Cumulative reinvests interest for compounding; non‑cumulative pays out monthly/quarterly/half‑yearly/annually.

What is the TDS on FD interest?

TDS usually applies above ₹40,000 (₹50,000 for seniors) in a financial year with PAN; overall tax depends on slab.

Can FDs be used for loans or credit cards?

Yes, overdraft/loan against FD provides liquidity; secured credit cards against FD can build credit.

What are NRE/NRO/FCNR/RFC FDs?

NRE parks foreign earnings in INR; NRO manages India‑sourced income; FCNR is in foreign currency; RFC serves returning NRIs/PIOs with foreign currency deposits. Terms differ by bank.

How to choose the right FD?

Align tenor with goals and liquidity, compare rates and features, consider safety and ratings, and select payout mode per income needs.