At-a-glance comparison
| Type | Best for | Tenure | Tax angle | DICGC cover |
|---|---|---|---|---|
| Regular FD | Default lump-sum parking | 7 days to 10 years | Interest fully taxable at slab; TDS past ₹40,000/yr | Yes — ₹5L |
| Tax-Saver FD | Section 80C slot | 5-year lock-in (no premature break) | Principal up to ₹1.5L deductible under 80C; interest taxable | Yes — ₹5L |
| Senior-Citizen FD | Depositors aged 60+ | 7 days to 10 years | Higher TDS threshold — ₹50,000/yr; +0.5% rate bonus | Yes — ₹5L |
| Flexi / Sweep-in FD | Cash buffer above savings threshold | Short — auto-rolls | Same as regular FD | Yes — ₹5L |
| Monthly-Income FD | Retirees needing monthly cashflow | 1 to 10 years | Same as regular FD; payout monthly instead of cumulative | Yes — ₹5L |
| NRE FD | NRI offshore savings | 1 to 10 years | Interest tax-free in India; fully repatriable | Yes — ₹5L |
| NRO FD | NRIs with India-source income | 7 days to 10 years | Interest TDS 30% + cess; repatriation capped at USD 1M/year | Yes — ₹5L |
| Corporate / NBFC FD | High-rate slice of allocation | 1 to 7 years typically | Interest taxable; TDS thresholds same | No — credit rating only |
Regular FD
The default product. You commit a lump sum at a fixed rate for a chosen tenure between 7 days and 10 years. Interest can be compounded (cumulative) and paid at maturity, or paid out periodically (monthly / quarterly / half-yearly / annually). Every Indian bank offers this; rate cards differ slightly by bank and by tenure band. DICGC insurance covers up to ₹5 lakh per depositor per bank.
Use the FD calculator to model any regular FD across compounding choices and payout modes.
Tax-Saver FD (Section 80C)
A tax-saver FD lets you claim the principal — up to ₹1.5 lakh per financial year — as a deduction under Section 80C. The trade-off is strict: a 5-year lock-in with no premature withdrawal, no loan against the deposit, no auto-renewal. In every other respect — rate, compounding, tenure of the lock-in — it behaves like a regular FD.
The "tax-saver" label refers only to the principal deduction. The interest you earn is still fully taxable at your slab rate. This trips up a surprising number of savers expecting tax-free returns.
Pick a tax-saver FD only if you actually have an unused 80C slot. If your ELSS, PPF, EPF, life-insurance premium, and home-loan principal already total ₹1.5 lakh, a tax-saver FD adds nothing — and the 5-year lock-in makes it strictly worse than a regular FD of the same tenure.
Senior-Citizen FD
Available to depositors aged 60 and above. Two benefits versus the regular FD:
- A +0.5% rate bonus on standard FD rates at almost every bank. Some PSU banks now offer +0.75% for super-seniors (aged 80+).
- A higher TDS threshold — ₹50,000 of FD interest per year (vs ₹40,000 for non-seniors) before TDS at 10% applies on the combined FD + RD interest from a single bank.
Structurally identical to a regular FD. If you qualify by age, always pick the senior-citizen variant — there's no downside. Senior Citizen FD calculator .
Flexi / Sweep-in FD
A flexi-FD links your savings account to an automatic FD facility. Balance above a chosen threshold (typically ₹25,000–₹50,000) auto-converts into short-tenure FDs that earn FD-rate interest. If your savings balance dips below the threshold — say from a debit-card transaction — the most recent FD is broken to top up.
You get FD-rate returns on idle surplus without locking it. Most banks brand this differently — HDFC SuperSaver, SBI MOD (Multi Option Deposit), ICICI Money Multiplier, Axis Encash 24, Kotak Sweep — and the mechanics vary in detail (sweep frequency, minimum FD size, partial-break rules). Confirm with your bank before activating.
Monthly-Income FD
Structurally a regular FD with the payout mode set to monthly interest instead of cumulative. The bank pays simple-interest monthly and returns the principal at maturity. Best fit: retirees who hold a corpus and want predictable monthly cashflow without breaking into the principal.
A monthly-payout FD earns slightly less than a cumulative FD at the same rate (you don't get compounding on the interest you withdraw each month). Model both modes side-by-side in the FD calculator using the payout-mode toggle.
NRE and NRO FDs (for NRIs)
Two distinct products for Non-Resident Indians, governed by FEMA and the Income Tax Act:
NRE (Non-Resident External) FD
Funded only from foreign-source income (your offshore salary converted to INR via inward remittance). Interest is fully tax-free in India. Both principal and interest are freely repatriable to your source country — no caps. Currency-conversion risk applies: if the INR weakens against your home currency, your repatriated value falls. Most NRIs hold the bulk of their Indian liquid savings here.
NRO (Non-Resident Ordinary) FD
Funded from Indian-source income — rent on Indian property, dividends, pension, business income. Interest is taxable in India at 30% TDS plus surcharge and cess. Repatriation is capped at USD 1 million per financial year (post-tax). Use this for India-rupee cashflows you can't legally hold in an NRE account.
Corporate / NBFC FD
Issued not by a bank but by a non-banking financial company or corporate house — HDFC Ltd, Bajaj Finance, LIC Housing Finance, Mahindra Finance, Shriram Finance, and similar. Rates are typically 100–200 basis points above comparable bank FDs (so 8%–9% when bank FDs are 7%).
The catch: no DICGC cover. If the NBFC defaults, your only protection is the issuer's credit rating from CRISIL, CARE, or ICRA. Look for AAA or AA ratings; below that, the rate premium isn't worth the credit risk. Even at AAA, never put more than 10–15% of your total FD allocation into NBFC FDs.
DHFL's 2019 default — when an AAA-rated NBFC's FD-holders lost crores — is the cautionary tale. Ratings are not guarantees; they reflect a point-in-time assessment that can change.
Which one should you pick?
- Regular FD — your default for any lump-sum parking. Match tenure to when you'll need the money.
- Tax-saver FD — only if you have unused 80C headroom and you can lock the principal for 5 years. Otherwise skip.
- Senior-Citizen FD — always, if you're 60+. There's no downside.
- Flexi / Sweep-in — for the cash buffer above your monthly expenses. Earns FD rates on money you'd otherwise leave idle in savings.
- Monthly-Income FD — for retirees who want monthly cashflow from a corpus without depleting principal.
- NRE FD — for NRIs with foreign-source income wanting tax-free, freely-repatriable INR savings.
- NRO FD — for NRIs receiving Indian-source income (rent, pension) that can't legally sit in an NRE account.
- Corporate / NBFC FD — for a small high-return slice (10–15% max) with AAA-rated issuers. Never your full allocation.
See also: FD vs RD compared — the closely-related "should I do lump-sum or monthly" question.