FD Rates for 4 Years

FDs are offered by banks and non-banking financial institutions (NBFCs) where you invest a lump sum amount for a predetermined tenure. During this tenure, you earn interest on your deposit, offering a safe and stable return on your investment. Interest rates vary depending on the bank/NBFC, deposit amount, and tenure. A higher rate means more interest earned on your deposit, allowing you to grow your savings effectively.

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If you plan to invest in Fixed Deposit for 4 years, finding and comparing rates offered by different banks and NBFCs is necessary. The interest rate range for FDs with a 4-year tenure typically falls between 5.75% p.a. to 7.86% p.a. By knowing the available options, you can choose the FD plan that offers the highest return on your 4-year investment.

Top Banks Offering FD Rates For 4 Year Tenure

A 4-year FD allows investors to lock in their funds long enough to enjoy higher interest rates compared to shorter tenures. Choosing a bank that offers even a marginally higher interest rate can substantially impact the overall returns. Over 4 years, this difference can compound, resulting in a significantly larger corpus.

Let's take a look at the top banks and their 4-year FD interest rates to help you make wise financial decisions regarding your investment.

FD Rates For 4 Year Tenure in Public Sector Banks

The following table presents the interest rates offered on 4-year Fixed Deposits (for amounts below ₹2 crore) by public sector banks. Find the interest rates for both senior citizens and the general public.

FD Rates for 4-Year by Private Sector Banks

The following table presents the interest rates offered on 4-year Fixed Deposits (for amounts below ₹2 crore) by private sector banks. Find the interest rates for both senior citizens and the general public.

FD Rates For 4 Year Tenure in Small Finance Banks

The following table presents the interest rates offered on 4-year Fixed Deposits (for amounts below ₹2 crore) by small finance banks. Find the interest rates for both senior citizens and the general public.

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

FD Calculator

An FD calculator, or Fixed Deposit calculator, is an online tool that helps you estimate the maturity amount and interest you will earn on your fixed deposit investment.

FD Calculator considers factors like:

• Principal amount: The amount of money you deposit in the FD.
• Interest rate: The rate offered by the bank or financial institution on your FD.
• Tenure: The period for which your FD is locked in.

The calculator then provides you with the maturity amount, which is the total amount you will receive at the end of the investment term, including the principal amount and the interest earned.

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

Features of 4-Year Fixed Deposit

The 4-year fixed deposits (FDs) are a savings option that locks in your money for four years in exchange for a guaranteed interest rate that's usually higher than shorter terms. Many banks offer interest payouts throughout the 4 years, which can further increase your earnings.

To decide if a 4-year FD aligns with your financial goals and risk tolerance, you should know about the features of 4-year FDs.

• Fixed Interest Rate: You lock in an interest rate for the entire 4 years, offering predictability and protection from fluctuating market conditions.
• Higher Interest Potential: Compared to shorter FDs, 4-year FDs typically offer more attractive interest rates, allowing you to earn more on your savings.
• Compounding Interest: Many banks provide quarterly or even monthly compounding on 4-year FDs.
• Flexibility in Interest Payout: You can receive interest payouts periodically (monthly, quarterly) or reinvest it with the principal amount to maximize your returns.
• Loan Against FD: You may be able to take a loan against your FD, providing access to funds without breaking the deposit. However, this might come with a slightly lower interest rate on the FD.
• Maturity Options: Upon maturity, you can withdraw your principal amount along with the accumulated interest or reinvest it for another term.

Factors Influencing Fixed Deposit Interest Rates

FD interest rates play a crucial role in the financial decisions of investors. These rates determine the return on one of the most popular and secure investment options but are influenced by complex economic and bank-specific factors. Let's take a look at the major factors that influence FD interest rates.

• Repo Rate and Monetary Policy: The repo rate, the rate at which the central bank lends money to commercial banks, heavily influences FD rates. When the repo rate rises, FD rates generally follow suit, and vice versa.
• Inflation Rate: Inflation refers to the rising cost of goods and services. To maintain the purchasing power of your FD investment, interest rates tend to be higher during inflationary periods.
• Economic Conditions: Overall economic health plays a role. In a growing economy with high credit demand, banks might offer higher FD rates to attract deposits and meet lending needs.
• Demand and Supply of Funds: When there's a high demand for funds in the market, banks raise FD rates to attract more deposits. Conversely, excess liquidity can lead to lower FD rates.
• Bank's Liquidity Needs: Banks need to balance their lending and deposit levels. If a bank needs more funds, it might offer higher FD rates to incentivize deposits.
• Tenure of the FD: FDs with longer lock-in periods offer higher interest rates compared to shorter ones. Banks value the predictability of long-term funds.
• Credit Rating of the Bank: FDs with higher credit rating banks may offer slightly lower interest rates due to the perceived lower risk. Lower-rated banks might offer higher rates to attract depositors.
• Competition: Banks compete for deposits, and FD rates can be influenced by the offerings of other banks in the market.

Tips to Choose the Right FD For 4 Year Tenure

Choosing a 4-year fixed deposit (FD) is a strategic decision for those seeking a balance between liquidity and higher returns. This medium-term investment offers better interest rates than shorter tenures while providing access to funds sooner than long-term options.

Here are some factors to consider when choosing a Fixed Deposit (FD) for a 4-year tenure.

• Interest Rate: Interest rate is a key factor impacting your returns. Compare rates offered by different banks and NBFCs (Non-Banking Financial Companies) for 4-year FDs. Longer tenures often come with slightly higher rates.
• Credibility of the Institution: Opt for reputable banks or NBFCs with a good credit rating (AA or higher) from agencies like CRISIL or ICRA. This ensures the safety of your deposit.
• Premature Withdrawal Penalties: Check the penalty for withdrawing your FD before maturity. Some offer negligible penalties for specific needs, while others may have significant charges.
• Interest Payout Option: Choose between cumulative or non-cumulative interest. Cumulative FDs pay interest along with the principal at maturity. Non-cumulative FDs pay interest periodically (monthly, quarterly, or annually).

Tax Implications of 4 Year Fixed Deposit

The 4-year fixed deposits offer competitive interest rates thereby maximizing your FD returns. However, it is important to understand that taxes reduce the actual amount you earn from these FDs. Let's see how taxes affect your 4-year FD returns.

Tax on Interest Income

• Interest earned on FDs is considered "Income from Other Sources" and is fully taxable.
• The interest income is added to your total income and taxed according to your income tax slab rate.

Tax Deducted at Source (TDS)

• Banks deduct TDS (Tax Deducted at Source) on FD interest if it exceeds a certain limit in a financial year.
• The current limit is ₹40,000 for non-senior citizens and ₹50,000 for senior citizens (aged 60 and above).
• The TDS rate is typically 10%, but it can be 20% if you don't provide your PAN details.
• The TDS rate is currently 10% if you provide your PAN details to the bank.
• If you don't provide PAN, TDS is deducted at a higher rate of 20%.

Income Tax Act

• Tax-saving FDs with a lock-in period of 5 years offer tax deductions under Section 80C of the Income Tax Act, but these aren't very common.

Steps to Open a 4 Year FD Account

A 4-year fixed deposit (FD) is a smart choice for those seeking higher returns without locking funds away for too long. This medium-term option typically offers better interest rates than shorter tenures. Opening a 4-year FD is a simple task that can secure your money's growth.

Here's a step-by-step instructions to help you open your 4-year FD account easily.

• Step 1: Research and compare different banks' FD interest rates and terms.
• Step 2: You can open FDs online through their website or mobile app, or by visiting the bank branch.
• Step 3: You'll need to provide KYC (Know Your Customer) documents as part of the FD application process.
• Step 4: You'll need to fill out an FD application form.
• Step 5: Once you've completed the form, submit your application along with your KYC documents.
• Step 6: The bank will provide you with an FD receipt or confirmation document after a successful application and deposit.

Steps to Close FD Account on Maturity

When your 4-year fixed deposit (FD) reaches maturity, you can reinvest or withdraw your funds. You can reinvest for potentially higher returns or withdraw your funds for other needs. Here's a step-by-step procedure to close your 4-year FD account upon maturity, ensuring you handle your funds effectively and in line with your current financial goals.

Close FD by Visiting the Bank Branch

• Visit the branch where your FD account is held.
• Take the original FD receipt and any other required documents (closure form, ID proof).
• Meet a bank representative and inform them about your intent to close the matured FD.
• You'll likely be asked how you want to receive the proceeds:
• Transfer to Savings Account: Provide your savings account details where you want to receive the FD amount (principal + interest).
• Cash Payment: If you prefer cash, you might be limited by withdrawal limits. Check with the bank beforehand.
• The bank representative will process your request and credit your chosen account within a specified timeframe.

Steps to Close FD Account Online

• Some banks allow closing FDs online through their Internet banking platform.
• Look for an option to "Matured FDs" or "Close FDs."
• Follow the on-screen instructions, which likely involve selecting your FD and specifying the receiving account for the proceeds.
• Once submitted, the bank will process the request and electronically transfer the funds to your nominated account.