2 Year FD Interest Rate

Are you looking for a secure way to park your retirement funds, preserve capital for your child’s education or to invest for future expenses? If yes, then a 2-year FD is an attractive option that will provide security, decent returns and liquidity. A 2-year fixed deposit is a popular option that will help you grow your money steadily while you save for your financial goals.

Choosing the best FD rates for 2 years can be challenging as many Banks and NBFCs offer competitive interest rates. It is important to research and compare the fixed deposits offered by various Banks and NBFCs to get the best 2 year FD interest rate and maximise your returns.

Shivalik Small Finance Bank Limited is offering the best FD rate for 2 years with an interest rate of 8.55%.

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2 Year FD Interest Rate by Top Banks

Choosing the right Bank or NBFC for your fixed deposit will help you get the Best FD rate for 2 years of maturity to grow your money. The right bank will offer the right interest rate, as well as liquidity benefits to yield optimal returns on your investment. Here are the top banks that are offering the best FD interest rates for 2 years.

FD Interest Rates For 2 Years in Public Sector Banks

Top NBFCs are giving the best 24 months FD interest rates as well as security and guaranteed returns. The table below shows the interest rates of various NBFCs for a 2 year fixed deposit:

Public Sector Banks Interest Rates (p.a)
Punjab & Sind Bank 6.00%
Indian Overseas Bank 6.80%
Bank of Baroda 6.85%
Bank of India 7.25%
Canara Bank 6.85%

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Note:The interest rates are subject to change. Please check the official website for the latest information.

FD Interest Rates For 2 Years in Private Sector Banks

You can get the best FD interest rates for a 2 years maturity period by investing in private sector banks fixed deposits. These banks offer good returns on your deposits, helping you maximise your investments. Given below are the top private sector banks that are offering the best 2 year FD interest rates:

Private Sector Banks Interest Rates (p.a)
IndusInd Bank 7.50%
RBL Bank 8.00%
Bandhan Bank 7.25%
Kotak Mahindra Bank 7.15%

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Note:The interest rates are subject to change. Please check the official website for the latest information.

FD Interest Rates For 2 Years in Small Finance Banks

Offering attractive interest rates, small finance banks will help you grow your investment steadily in 2 years. With flexible liquidity options and optimal returns, here are the top banks giving FDs for a 2 year maturity period along with their interest rates:

Small Finance Banks Interest Rates
hivalik Small Finance Bank Limited 8.55%
Jana Small Finance Bank 8.25%
Equitas Small Finance Bank 7.75%
Utkarsh Small Finance Bank 8.50%

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Note:*Note- The interest rates are subject to change. Please check the official website for the latest information.

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Check the best FD Rates for different tenures from the table below:

FD Rates for 45 Days FD Rates for 90 Days
FD Rates for 6 Months FD Rates for 2 Years
FD Rates for 3 Years FD Rates for 4 Years
FD Rates for 5 Years FD Rates for 4 Years

2 Years FD Interest & Maturity Amount Calculator

When investing in a 2 year FD, you may find it confusing or challenging to calculate the maturity amount. To make it easier for you, banks and NBFCs provide an online FD calculator. The calculator provides accurate and easy to understand results which makes it easy for you to make informed decisions, maximise returns and plan your finances.

The FD calculator is easy to use, all you have to do is enter the deposit amount, maturity period and the interest rate. You will then get the estimated maturity amount.

Maturity Date :  
Invested Amount :  ₹10,000
Interest Amount :  ₹666
Maturity Amount :  ₹10666

You can check the interest earned on different deposit amounts from different banks. Check the links in the table below:

Calculate your FD maturity amount manually

Calculating your FD maturity amount can also be done manually using the formula:
A=P x (1+rn)nt

A is the maturity amount
P is the deposit amount
r is the rate of interest
n is the number of times the interest is compounded
t is the maturity period

Let us calculate with an example to help you understand the calculation process:
For example,
P be ₹1,00,000
r be 7.75% = 0.0775
n is 1 time a year
t is 2 years

Entering the data into the formula:
A=1,00,000 x (1+0.07751)1 x 2
A=1,00,000 x (1+0.0775) 2
A=1,00,000 x (1.0775) 2
A=1,00,000 x 1.16130625

Therefore, from the above calculation, for a deposit of ₹1,00,000 for a period of 2 years at an interest rate of 7.75%, you will approximately get ₹1,16,130.63.

Factors Influencing FD Interest Rates

Many factors like overall economic environment, financial health of the banking sector and the specific policies set by individual banks influence the fixed deposit rates. Understanding these factors can help you get higher returns on your investment. To get the best fd interest rate you can consider the following factors while considering opening an FD account.

  • Reserve Bank of India monetary policy: The RBI’s monetary policy is important as it determines the fixed deposit rates. This is because they make major decisions on the repo rate which directly affects the interest rate offered by banks. When RBI increases the repo rate, banks will increase the interest rates.
  • Inflation: Inflation also directly affects the FD interest rates as banks will adjust their interest rates according to inflation to make sure that the FDs remain attractive for investors. When inflation is high, banks will increase their interest rates.
  • Demand and supply of loans: The demand and supply of loans also plays an important role. When there is high demand for credit, banks will offer higher FD rates to get more funds to lend. Similarly, if there is less demand for credit, banks will offer lesser interest rates.
  • Competition among banks:With many banks and NBFCs offering FD accounts, the FD rates becomes more competitive. Banks will offer higher interest rates than their competitors to attract investors and ensures that the FD rates remain attractive.
  • Overall economic condition: The economic conditions like the growth rate, unemployment rate, and consumer spending will impact the FD interest rates for 2 year maturity period. A good economy will lead to higher interest rates due to increased demands in loans and deposits. While a bad economy will lead to lower interest rates as demands in loans and deposits will be low.
  • FD duration: The duration of your FD will significantly impact the interest rate. Shorter term FDs will offer lower interest rates while long term FDs will usually offer higher interest rates.

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How to Choose the Right FD for 2 Years

Selecting the right 2 years fixed deposit will require careful consideration of many factors to make sure that your investments aligns with your financial goals and you get maximum returns. Here are some tips on how to choose the right 2 year fixed deposit:

  • Research interest rate: The interest rates of an FD for a 2 year tenure is important as it determines the returns of your investment. Different banks and NBFCs offer different interest rates, some higher than others. So, compare the interest rates offered to get the best FD rates for 2 years and maximise returns.
  • Check the bank’s credibility: It is also important to choose a bank with a good reputation and stable financial health. Well known banks, and other financial institutions are safe choices to make sure you get good returns. Remember to check the bank’s reputation, credit rating and customer review for better understanding.
  • Know the compounding frequency: Compound interest will give you higher returns on your FDs. Banks can offer monthly, quarterly or yearly compound frequency. So, knowing the compounding frequency the bank offers on your FD will help you choose wisely and get higher returns.
  • Understand additional benefits: Look for banks that are offering additional benefits like premature withdrawal, auto renewal and online account opening of your FD. This can help make the management process more convenient for you.
  • Consider tax implications: The interest earned on your FD is taxable, so consider the post tax returns if you fall under the tax bracket. You can use any available online calculator to help you understand the tax impact on your total earnings.
  • Understand premature withdrawal penalties: Check for liquidity options, as it can make it easier for you to withdraw funds in case of emergencies. Check for the penalties involved as it can impact your maturity amount. Choose a bank that offers reasonable penalty charges and flexible withdrawal options.

Tax Implications of 2 Years FDs

It is important to understand the tax implications associated with 2 year fixed deposits to make important financial decisions and optimise your returns. Here are the tax implications on 2 year FDs:

  • Taxable Interest: The interest earned on your FD is considered taxable income by the Indian government. This means you'll need to pay taxes on the interest you receive when the maturity period ends or when interest payouts are made depending on your chosen FD option. The tax rate applicable to your FD interest depends on your income tax bracket. For example, if you fall under the 30% tax bracket, you'll be taxed 30% on the interest earned.
  • Tax Deducted at Source (TDS): To simplify tax collection, banks are authorised to deduct tax at source (TDS) on FD interest income. This deduction happens automatically if the interest earned on your FD exceeds certain limits:
  • ₹40,000 per year: This applies to regular investors who are below 60 years of age.
  • ₹50,000 per year: This applies to senior citizens aged 60 years or above.

How to Open a 2 Years FD Account

Opening a 2 year FD account has been simplified by banks and NBFCs to make investing more convenient. They offer both online and offline options to open an FD account. Here are the steps to open a 2 year fixed deposit account:

Opening Your 2 Years FD Account Online

  • Step 1: Visit your chosen bank's website and locate the FD section for account creation. Fill out the online application, providing your KYC (Know Your Customer) details, investment amount, and selecting the 2 years maturity period.
  • Step 2: Submit scanned copies of required documents like ID proof, address proof, and PAN card.
  • Step 3: Transfer the investment amount from your savings account to the new FD account using online banking, UPI or another secure payment method
  • Step 4: Once the bank verifies your documents and processes your application, you'll receive confirmation that your 2 years fixed deposit account is active.

Opening Your 2 Years Fixed Deposit Offline

  • Step 1: Go to your preferred bank branch and inform a representative that you want to open a 2 years FD.
  • Step 2: Fill out the paper application form and submit physical copies of your ID proof, address proof, and PAN card.
  • Step 3: Make a cash deposit for your investment or initiate a transfer from your savings account to the new FD account.
  • Step 4: The bank will then process your application, verify your documents, and activate your FD account.
  • Step 5: Upon activation, you'll receive a confirmation email or a physical slip with account details.

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Frequently Asked Questions

Currently, Shivalik Small Finance Bank Limited offers the best FD rate for 2 years with 8.55% p.a.

Yes, FDs for a 2 years maturity period are taxable based on the Income Tax Act.

FD rates are calculated using the formula A=P x (1+rn)nt. You can also calculate using an online calculator making it easier and more accurate.

A 2 year fixed deposit account offers high interest rate, minimal premature withdrawal charges, loan against FDs, and more.

Yes, you can avail a loan against the available amount on your fixed deposit account.

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