Best FD Rates For 3 Years

A 3 year FD investment plan is a low-risk option suitable for individuals who depend on stable returns. Among the various FD tenures available, the 3-year fixed deposit is a good option for savings over the medium term. Several leading banks in India offer competitive interest rates on 3-year fixed deposits. This is a popular choice among investors because of the fixed interest regular payouts and protection of the principal amount.

This webpage will explore the best FD Rates For 3 Years from top public, private, and small finance banks and NBFCs.

Highlights on FD Rates For 3 Years

The FD rates for a 3-year tenure are generally higher than those offered for shorter tenures, such as 1 year or 2 years. The table below shows the highlights of the FD rates for 3 years:

Best 3-Year FD Interest Rates by Banks

Several leading banks in the market are offering competitive interest rates on 3-year fixed deposits, making it an opportune time for investors to explore the best FD options available.

The tables below show a comparative analysis of the 3-year fixed deposit (FD) interest rates across various sectors.

3 Year FD Interest Rates in Public Sector Banks

Here is a list of 3 years FD rates for deposits below ₹2 Crore from top public sector banks:

3 Year FD Interest Rates in Private Sector Banks

Here is a list of 3 years FD rates for deposits below ₹2 Crore from top private sector banks:

3 Year FD Interest Rates in Small Finance Banks

Here is a list of 3 Year FD rates for deposits below ₹2 Crore from small finance banks:

3 Year FD Interest Rates From Top NBFCs

Here is a list of 3 Year FD rates for deposits below ₹2 Crore from Top NBFCs:

Besides Banks FD and NBFC FD, you can also check the Post Office FD interest rates, which range from 6.90% to 7.5% for both regular and senior citizens.

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

FD Calculator

An online FD calculator helps you determine the potential returns you can earn by investing in a fixed deposit. Just enter the total investment, rate of interest, and tenure to get the estimation of potential returns.

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

Formula to Calculate FD Maturity Amount

The maturity amount of a Fixed Deposit (FD) can be calculated manually. The mathematical for the FD calculation is as follows:

A = P*(1+r/n)^(nt)

Where,
A: Represents the future amount or the total value of your investment after a certain period, including both the initial principal and the interest earned.
P: Represents the principal amount, which is the initial amount of money you invest.
r: Represents the annual interest rate, expressed as a decimal.
n = number of times interest is compounded per year,
t: This represents the period in years.

Factors Influencing FD Interest Rates for 3 Years

Here are the key factors that influence 3-year fixed deposit (FD) interest rates:

• Monetary Policy and Inflation: Banks adjust FD rates based on RBI’s monetary policy and inflation. When the RBI raises repo rates, banks increase FD rates to maintain margins. However, FD rates decline when the RBI cuts rates. High inflation also leads banks to raise FD rates to provide real positive returns and preserve depositors’ purchasing power.
• Bank Liquidity and Market Competition: Banks adjust FD rates based on liquidity and competition. Banks with high liquidity offer higher FD rates to attract deposits. Lower liquidity banks offer lower rates. The market competition also impacts rates, as banks raise FD rates to match or beat competitors and stay attractive to customers.
• Tenure: Longer tenure FDs generally have higher interest rates than shorter tenures. This is because the bank’s cost of funds increases for longer-term deposits.
• Bank’s Credit Rating: A bank’s credit rating reflects its financial strength and stability. Customers generally prefer to park their funds with higher-rated banks, allowing these banks to offer marginally higher FD rates.

Tips to Choose the Right 3 Year Fixed Deposit

Here are the key considerations to help you choose the right 3-year fixed deposit (FD) for your needs:

• Interest Rates: Compare rates across banks to find the highest return.
• Bank Reputation: Opt for reputable, financially sound banks to ensure safety.
• Liquidity Needs: Look for flexible withdrawal policies if you need access to funds.
• Tax Implications: Understand how interest income will be taxed.
• Compounding Frequency: Choosing quarterly compounding can maximize returns.
• Additional Features: Some banks offer options like periodic interest payouts.

Tax Implications of 3 Years Fixed Deposits

According to the Income Tax Act of 1961, the interest accrued from an FD is categorized as ‘Income from Other Sources’. Here are the tax implications of 3 Years Fixed Deposit:

• The interest earned from an FD is fully taxable if it exceeds ₹40,000 in a financial year.
• Senior citizens can avail of a tax exemption on FD interest up to ₹50,000 under Section 80TTB of the act above.
• A 10% Tax Deducted at Source (TDS) is applicable on annual interest earnings.
• If PAN details are not provided, the TDS on monthly FD interest will be taxed at a rate of 20%.
• For Non-resident Ordinary (NRO) Fixed Deposits, the TDS on interest income will be applicable at 30%.

Steps to Open a 3 Year FD Account

Here are the steps to open a 3-year fixed deposit (FD) account in a brief

• Step 1: Research and select the bank with the best 3-year FD interest rates.
• Step 2: Gather required documents (identity proof, address proof, income proof).
• Step 3: Visit the bank branch and inform the representative of your intent to open a 3-year FD.
• Step 4: Fill out the application form with personal and financial details.
• Step 5: Decide on the investment amount and choose between cumulative or non-cumulative FD.
• Step 6: Provide the bank account details for interest and principal credit.
• Step 7: Submit the completed application form and required documents.

Steps to Close FD Account on Maturity

Here are the steps to close your FD account after 3 years on maturity:

• Step 1: Go to your bank’s online platform and log in to your account.
• Step 2: Navigate to the section for service requests or account management.
• Step 3: Look for the option to request ‘Premature Closure of Fixed Deposit’.
• Step 4: Provide the details of the fixed deposit account you want to close.
• Step 5: Verify the information and submit the closure request.
• Step 6: The Bank will process the request and transfer the payout to your designated account.
• Step 7: Confirm the credited amount matches the expected payout.