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Federal Bank offers higher fixed deposit interest rates than their savings account. The bank pays interest as per the investor’s wish. Also, the investors can opt for monthly, quarterly or annual interest payments. However, the interest is compounded every quarter. The bank also allows premature withdrawal facility and gives loans against their FDs. In this article, we have covered about Federal Bank FDs and its interest rates in detail.

Federal Bank FD Rates 2021

Following table shows Federal Bank fixed deposit interest rates.

Federal Bank term deposit rates range between 2.5% and 5.5% for regular citizens and between 3%-6% for senior citizens for a tenure of 7 days to 10 years. The FD rates of Federal Bank are higher than their savings account. Moreover, senior citizens get a higher rate of interest of 0.5% on their FDs. The interest is compounded quarterly, but paid monthly, quarterly or annually as per the choice of the investor.

The highest term deposit rate for Federal Bank is 5.50% for a regular investor for the tenure of 5 years and above. Also, for the same tenure, the senior citizen FD rate is 6%.  Furthermore, returns from Federal Bank fixed deposits can be calculated using the Scripbox’s FD Calculator.

TenureRegular FD Interest RatesSenior Citizen FD Interest Rates
7 days to 29 days2.50%3.00%
30 days to 45 days2.75%3.25%
46 days to 90 days3.00%3.50%
91 days to 180 days3.75%4.25%
181 days to 270 days4.00%4.50%
271 days to 364 days4.40%4.90%
1 year to 1 year 364 days5.10%5.60%
2 years to 4 years 364 days5.35%5.85%
5 years and above5.50%6.00%
Note: Interest on Federal Bank Fixed Deposits are revised periodically

Key Features of Federal Bank Fixed Deposit

Federal Bank fixed deposit schemes offer better returns than a savings bank account. Following are the key features of Federal Bank fixed deposits:

Tenure

The Federal Bank fixed deposit tenure ranges between 7 days to 10 years. Once invested, one cannot change the tenure of Federal Bank fixed deposit investment. However, one can opt for premature withdrawal, and they can close the existing Federal Bank fixed deposit and start a new FD with the desired tenure.

Minimum and Maximum Deposit Amount

The minimum amount of deposit for Federal Bank FDs is INR 1000. Also, there is no limit on the maximum investment amount, except for tax saving deposits. The maximum limit for these deposits is INR 1,50,000 per annum.

Federal Bank FD Interest Rate

Federal Bank fixed deposit rates range between 2.5% and 5.5% for regular citizens and the tenure range being 7 days to 5 years and above.

Preferential Interest Rates

Federal Bank offers preferential interest rates for senior citizen depositors. The Federal Bank fixed deposit rates for senior citizens range between 3% to 6%.

Eligibility

To open an FD account with Federal Bank, one has to be eligible. Following are the individuals that are eligible to invest in Federal Bank FDs.

  • Individuals, including minors
  • Sole proprietors
  • Partnership firms
  • Joint stock companies
  • Hindu undivided families (HUF)
  • Clubs, associations and trusts

Documents required

To open a fixed deposit account with Federal Bank, one needs the following documents.

The documents that one requires to invest in Federal Bank FDs are

  • FD application form
  • Photographs of the depositor
  • PAN Card
  • ID proof (PAN Card, Driving License, Aadhar Card, and Passport)
  • Address proof (Aadhar Card, Telephone bill, Electricity Bill)
  • Age proof (Birth certificate, PAN Card, Discharge certificate, matriculation certificate).

Additional Payments

It is not possible to deposit any additional amount in an existing Federal Bank fixed deposit. However, one can always invest in a fresh Federal Bank fixed deposit with an additional amount.

Tax and TDS

Investment in Federal Bank Tax Saving Fixed Deposit qualifies for tax saving under Section 80C of the Income Tax Act, 1961. Depositors can claim the same while filing income tax returns. All other Federal Bank FDs do not qualify for tax saving.

Also, the interest that one earns on their Federal Bank fixed deposit investments is taxable as per the depositor’s income tax slab rates. Furthermore, the Federal bank deducts a TDS of 10% (20% if PAN card isn’t submitted) in case the interest income exceeds INR 40,0000 (INR 50,000 for senior citizens).

Moreover, to determine if the interest income from a Federal Bank term deposit is above or below the TDS threshold limit, one can use a bank fixed deposit calculator available online. Also, investors can estimate their tax liability using the Income Tax Calculator. Scripbox’s online Income Tax Calculator is free to use and helps in estimating tax liability.

Safety

Under the Deposit Insurance Scheme of RBI, DICGC insures all Federal Bank deposits up to INR 5,00,000.

Premature withdrawal

Federal Bank allows premature withdrawal of fixed deposits but with a penalty of 1% on the contracted interest rate.

Nomination Facility

Depositors can nominate beneficiaries for their Federal Bank FDs.

Auto-Renewal

Federal Bank offers an auto-renewal facility for the deposits.

Convenience

Opening and managing Federal Bank fixed deposit investments is easy and also convenient through their online portal.

Loan against FD and Overdraft

Federal Bank allows its investors to take a loan against their FDs to meet their liquidity requirements without breaking their FD. The loan is provided only against their fixed deposits and cash certificate. The bank doesn’t grant a loan against the tax-saving deposit. Investors can get up to 90% of the deposit amount as loan.

Investors can take loans such as loan against property (home loan), education loans, business loans, etc., against Federal Bank FD. Also, they can estimate their loan EMI using the loan EMI calculator. The loan EMI calculator works as a personal loan EMI calculator. One can also use it as a home loan EMI calculator and car loan EMI calculator. The investor can also use the EMI calculator in multiple scenarios by changing the variables like personal loan interest rate. They can also change the home loan interest rate and car loan interest rate.

Pan Card

A PAN card is mandatory to open a Federal Bank tax saving FD account. However, the other two schemes do not require PAN Card details. Though PAN Card isn’t mandatory, there are few implications of not disclosing PAN details. The applicable TDS rate is 20% instead of the usual 10%, as per the regulations of section 206AA. The Federal Bank will not issue any TDS certificate. Furthermore, all exemption certificates, including Form 15G and Form 15H, will be invalid.

Requirement of savings account

Individuals need not have Federal bank savings accounts to open a fixed deposit account.

Types of Fixed Deposit Schemes offered by Federal Bank

Following are the types of FD schemes that Federal Bank offers:

  • Fixed Deposit
  • Cash Certificate
  • Tax Savings Deposit
  • Millionaire Deposit

Types of Fixed Deposit Schemes: In Detail

Fixed Deposit

The Federal Bank Fixed Deposit is a good investment option for the ones who wish to invest and also get periodical income (interest). Following are the features of the scheme

  • Tenure: 7 days to 10 years
  • Minimum Deposit Amount: INR 1,000
  • Maximum Deposit Amount: No Limit
  • Interest Payout: Depositors can choose interest payment frequencies, monthly or quarterly or annually. The interest is credited to the Federal Bank Savings account automatically.
  • Loan Facility: Depositors can get a loan against their FD; they can avail a loan up to 90% of their deposit amount.
  • Auto Renewal Facility: Available
  • Nomination Facility: Available

Cash Certificate

Cash certificate is a growth oriented scheme. Also, the scheme is suitable for individuals looking to double their money in the shortest time at zero risks. Moreover, under this scheme, the interest is quarterly compounded and reinvested. Furthermore, the interest cannot be withdrawn until maturity. Following are the features of the scheme

  • Tenure: 6 months to 10 years
  • Minimum Deposit Amount: INR 1,000
  • Maximum Deposit Amount: No Limit
  • Loan Facility: Depositors can get a loan against their FD; they can avail a loan up to 90% of their deposit amount.
  • Auto Renewal Facility: Available
  • Nomination Facility: Available

Tax Savings Deposit

The Federal Tax Saving Deposit is a convenient and risk free option that provides tax benefits to depositors. The deposits up to INR 1,50,000 per annum qualify for tax deduction under Section 80C of the Income Tax Act. Following are the features of the scheme

  • Lock in period: 5 years
  • Minimum Deposit Amount: INR 100 and in multiples of INR 100, thereafter
  • Maximum Deposit Amount: No Limit
  • Premature withdrawal: Not available
  • Loan Facility: Not available

Millionaire Deposit

The scheme allows systematic investments over a period of time and helps the depositors become millionaires on maturity. Also, this is a unique recurring deposit scheme. Furthermore, the monthly deposit amount and tenure of the scheme varies based on the type of investment option. The millionaire deposit scheme has the following types of investment options: Millionaire Federal Savings Fund, Multi-Millionaire Federal Savings Fund and Crorepati Federal Savings Fund. Following are the features of the scheme:

  • Loan Facility: Available
  • Premature withdrawal: Available, however, no interest is paid for withdrawals made before the completion of 1 year for NRE deposits.
  • Nomination Facility: Available
  • Eligibility: Any resident Indian or NRI customer can open the millionaire deposit account.
  • Repatriable: The amount is freely repatriable for NRI customers.

Does the Federal Bank offer Recurring Deposits?

Yes, the Federal Bank offers recurring deposit schemes. The scheme enables the depositors to invest a fixed amount every month systematically.

PeriodGeneral RatesSenior Citizen Rates
181 days to 270 days4.00%4.50%
271 days to less than 1 year4.50%5.00%
1 year to less than 30 months5.25%5.75%
30 months to less than 3 years5.35%5.85%
3 years and above5.50%6.00%
Note: Federal Bank revises RD interest rates periodically