HDFC Bank Fixed Deposit rates-2024
Introduction:
HDFC Bank Limited is one of India's largest private sector banks, headquartered in Mumbai, Maharashtra. It is also the third-largest company by market capitalization on Indian stock exchanges.
HDFC Bank offers a wide range of products and services, including wholesale and retail banking, various loans, and credit cards.
HDFC Bank offers its customers several fixed deposit options, allowing them to secure their surplus savings for a specified period and earn significant returns.
Upon opening an account, the depositor must make a one-time deposit. The funds are then locked in for the chosen duration, accruing interest accordingly. No additional deposits or withdrawals are permitted during this period.
Key Features and Advantages of HDFC Bank Fixed Deposits
Features and Benefits of HDFC Fixed Deposit
Senior Citizen Benefit: Senior citizens receive an additional 0.50% p.a. interest over the standard rates.
Minimum Deposit Requirement: The minimum amount to open an FD account with HDFC Bank is Rs. 5,000.
Nomination Facility: Available for account holders.
Attractive Interest Rates: HDFC Bank offers competitive FD rates.
Sweep-in and Super Saver Facilities: These options are available on the FD account, enhancing flexibility.
Compound Interest: Depositors can grow their investments by reinvesting the principal and the interest earned, thereby earning compound interest.
Tenure
Interest
Rates (PA)
Interest Rate
for Seniors (PA)
1 month - 1 month 15 days
3.5%
4%
1 month 16 days - 5 months 27 days
4.5%
4%
5 months 28 days - 8 months 30 days
5.75%
6.25%
9 months - 11 months 30 days
6%
6.5%
6.6%
7.1%
1 year 3 months 1 day - 1 year 5 months 29 days
7.1%
7.6%
1 year 8 months 30 days - 2 years 11 months
7.25%
7.75%
1 year 8 months 30 days - 2 years 11 months
7%
7.5%
2 years 11 months 1 day - 2 years 11 months 1 day
7.15%
7.65%
Types of HDFC Bank FD Schemes
HDFC Bank Senior Citizen Care FD
This exclusive fixed deposit scheme is designed for resident senior citizens aged 60 years and above (not applicable to NRIs) for both new FDs and renewals.
HDFC Bank offers an additional interest rate of 0.75% to senior citizens, which is an increment of 0.25% above the existing premium of 0.50%.
Maximum FD amount: Less than 5 crores.
Tenure: 5 years 1 day to 10 years.
In case of premature closure (including sweep-in or partial closure) before 5 years, the interest rate will be 1% below the contracted rate/base rate applicable for the period with HDFC bank, whichever is lower.
For premature closure after 5 years, the interest rate will be 1.25% below the contracted rate/base rate applicable for the period with HDFC bank, whichever is lower.
Depositors can conveniently open FDs online through HDFC Bank's website, mobile app, and net banking.
HDFC Bank SureCover FD
This scheme combines the benefits of an FD with the security of a life insurance cover.
Depositors receive a life insurance cover equivalent to the FD principal for the first year upon booking HDFC Bank SureCover FD.
FD amount: Rs. 2 lakh-10 lakh.
Flexible Tenure: 1-10 years.
Interest rates offered under this scheme are identical to regular fixed deposits.
Monthly/quarterly interest payout options and interest reinvestment are available.
Depositors can obtain an instant overdraft of up to 90% of their FD amount.
HDFC Bank Five-Year Tax Saving Fixed Deposit
Minimum Amount – Rs. 100, in Multiples of Rs. 100.
Maximum amount – Rs. 1.5 Lakhs (per Financial Year).
Tenure – 5 years (Locked).
Monthly and quarterly payout facility available.
Tax benefits under Section 80C of the Income Tax Act applicable only to the first holder in joint deposits.
Eligibility: Resident individuals and Hindu Undivided Families.
HDFC Bank Overdraft Against Fixed Deposits
Purpose: To meet immediate financial needs (household/business requirements) without breaking FD.
Depositors can borrow up to 90% of their FD’s overdraft.
Minimum FD amount: Rs. 25,000/-. A minimum of 6 months and 1 day required to obtain an overdraft against a fixed deposit or Super Saver facility.
Overdraft against fixed deposit or Super Saver facility on deposit held in a single name can be availed instantly via NetBanking.
Advantages:
Interest is payable only on the amount drawn, while the remaining FD continues to earn interest.
Flexibility to modify the maturity period, deposit, payment instructions, and rollover mode before maturity.
Option to choose between a Current Account and a Savings Account and link it to FD.
Cancellation of overdraft facility against singly held FD through net banking.
How to Open a Fixed Deposit Account with HDFC Bank
You can open an HDFC Bank FD account using various methods such as mobile app, internet banking, or in-person at a branch.
1) Internet Banking:
Step 1: Log in to your NetBanking account.
Step 2: Under the 'Transact' tab, select 'Open Fixed Deposits.'
Step 3: Choose the branch, specify the FD tenure and investment amount, and provide nominee details.
Step 4: Click 'Continue,' then 'Confirm' to finalize the details.
Step 5: Download the fixed deposit receipt/advice immediately after confirmation.
2) Mobile App - HDFC Bank App:
Step 1: Download and sign into the HDFC Bank App.
Step 2: Navigate to the 'Save' tab, select 'Deposit,' and then 'Open Fixed Deposit.'
Step 3: Enter all necessary deposit information and nominee details.
Step 4: Confirm the details to finalize the process.
Step 5: The fixed deposit receipt/advice is available for immediate download.
3) Offline at an HDFC Bank Branch:
Step 1: Visit your nearest HDFC Bank branch.
Step 2: Complete the HDFC Bank FD application form and submit it along with all necessary documents and the deposit amount.
Step 3: After the application is processed, you will receive an FD receipt.
Eligibility for Opening an HDFC Fixed Deposit
The following entities are eligible to open an HDFC fixed deposit account:
Indian residents
Sole proprietorship enterprises
Trusts
Limited companies
Hindu Undivided Families (HUF)
Partnership firms
These methods and eligibility criteria make it easy for various depositors to invest their money securely with HDFC Bank.
Qualifications for Opening a Fixed Deposit Account at HDFC Bank
Investors are required to fulfill the following criteria when considering depositing their funds into HDFC fixed deposit online:
Being an Indian resident
Operating as a sole proprietorship enterprise
Representing trusts
Holding positions in limited companies
Being members of a Hindu Undivided Family (HUF)
Engaging in partnership firms
Necessary Documents to Open a Fixed Deposit Account at HDFC Bank
Documentation Needed for Opening a Fixed Deposit Account at State Bank of India
In order to initiate a fixed deposit account with HDFC Bank, individuals are required to provide the following documentation:
Identity Verification
Aadhaar card
Voter ID
PAN card
Driver's license
Ration card with a photograph
Any government-issued identification card
Passport
Address Verification
Electricity bill
Bank statement with a cheque
Identification or license issued by the Post Office
Telephone bill
Passport
Early Withdrawal of HDFC Bank Fixed Deposit
HDFC Bank applies an interest rate for premature closure, which is determined as the lower of the following:
The base rate for the original deposit tenure.
The base rate applicable for the tenure during which the deposit has been held with HDFC Bank.
This base rate is applicable to all deposits under Rs. 1 crore at the time of deposit booking. For deposits exceeding Rs. 5 crores, the base rate will be calculated based on Rs. 5 crores at the time of booking.
Additionally, HDFC Bank imposes a penalty of 1% for premature withdrawals, including sweep-ins and partial withdrawals. However, this penalty does not apply to fixed deposits booked for durations ranging from 7 days to 14 days.
Role of Fixed Deposits in an Investment Portfolio
Investing in market-linked instruments carries risks, particularly when aiming for higher returns.
To achieve a balanced financial portfolio, it's crucial for investors to include safer investment options as well.
Fixed deposits offer a secure investment avenue with guaranteed returns, contrasting with higher-risk options.
Thus, even if investors incur losses from other ventures, they can offset some of those losses through the stable earnings from fixed deposits.
This strategy can help maintain financial stability in their overall investment portfolio.
Benefits of Investing in a Fixed Deposit Account
IFixed deposit accounts offer several advantages that make them appealing to investors:
Stable Returns: These accounts provide a constant interest rate, ensuring predictable and steady returns.
Low Risk: As FDs are not impacted by market volatility, they are considered low-risk, making them suitable for conservative investors.
Capital Preservation: The principal amount is secure, and investors are assured of receiving their initial investment plus the accrued interest at the end of the maturity period.
Flexible Tenure Options: Investors can select from various tenure lengths offered by banks, ranging from a few months to several years, to align with their financial objectives.
Ease of Investment: Setting up a fixed deposit account is easy, requiring only minimal paperwork and a straightforward application process.
Regular Income Stream: Particularly beneficial for retirees, FDs can provide a consistent income stream through periodic interest payouts (monthly, quarterly, or annually).
Loan Facilities: Fixed deposits can also serve as collateral for loans, offering financial flexibility while keeping the deposit intact.
Tax Benefits: Certain types of fixed deposits qualify for tax deductions under specific sections of the Income Tax Act, promoting long-term savings.
No Market Dependency: The performance of FDs is independent of market conditions, offering stability regardless of economic fluctuations.
Ideal for Short to Medium-Term Goals: FDs are well-suited for meeting short to medium-term financial objectives, such as purchasing a vehicle, funding education, or planning a holiday.
Drawbacks of Fixed Deposit Accounts
Fixed deposit accounts come with certain limitations, which are outlined below:
Taxation on Interest: The interest income from fixed deposits is taxable under "Income From Other Sources" when you file your Income Tax Returns (ITR). For those seeking tax-free earnings, options like Tax-Saver FDs, ULIPs, PPF, and government bonds may be more suitable.
TDS Applicability: TDS (Tax Deducted at Source) is deducted from the interest earned on fixed deposits, which can reduce the overall returns from your investment.
Comparatively Lower Interest Rates: Generally, fixed deposits offer lower interest rates, typically between 5% to 9% per annum, which may be less than other investment avenues, potentially limiting your investment growth.
Interest Rates and Inflation: Sometimes, the interest rates on fixed deposits may not keep up with inflation, leading to a decrease in the real value of your returns over time.
Fixed Interest Rates: Unlike other investments where rates might fluctuate, fixed deposits maintain a constant rate throughout their tenure. This means returns do not increase even if market or economic conditions improve.
Limited Access to Funds: Your funds are locked in for the duration of the deposit, restricting access to your money. Early withdrawal is possible but usually incurs penalties, affecting your total returns.
Understanding Loan Against Fixed Deposit
Investors with fixed deposits can secure a loan against their FD holdings. The maximum loan amount available can differ from one bank to another and is typically a specified percentage of the fixed deposit value.
The interest rates for loans against fixed deposits are generally lower than those for unsecured loans. Investors looking to take advantage of this should carefully compare interest rates.
The repayment period for such a loan is usually capped at the maturity term of the associated fixed deposit.
Tax Implications on Fixed Deposit Earnings
Interest earned from fixed deposits is subject to Tax Deducted at Source (TDS) according to the rules set forth in the Income Tax Act. This interest income is then reported on Income Tax Returns under "Income from Other Sources."
The Income Tax Department applies the TDS against the individual's total tax liability. However, TDS on interest income is only deducted when the total interest earnings across all sources exceed Rs. 40,000 annually.
If earnings are below this threshold, individuals should submit Form 15G/H to the financial institution to avoid TDS. Form 15G/H can also be submitted for interest earnings above Rs. 40,000, but in such cases, individuals must ensure they meet any remaining tax obligations themselves.
Additionally, if an individual invests in a tax-saving FD, they are eligible to claim a tax exemption on the principal amount up to Rs. 1.5 lakh per financial year.
What is a fixed deposit?
A fixed deposit is a type of savings account where money is deposited for a fixed period and earns interest at a predetermined rate.
How safe are fixed deposits?
Fixed deposits are considered very safe as they are not affected by market fluctuations and often guaranteed by the bank or financial institution.
Can I withdraw money from my fixed deposit before maturity?
Yes, but early withdrawal may incur penalties and result in lower interest earnings.
Do fixed deposits offer tax benefits?
Tax-saver fixed deposits qualify for tax deductions under Section 80C of the Income Tax Act but come with a lock-in period.
What documents are required to open a fixed deposit account?
Typically, you need identity proof, address proof, and sometimes a PAN card, along with the completed application form.
Author
Harish Malhi
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