Frequently Asked Questions

Is FD interest taxable?

Yes. FD interest is added to your taxable income. TDS of 10% is deducted if interest exceeds ₹40,000/year (₹50,000 for seniors). Submit Form 15G/15H to avoid TDS if income is below taxable limit.

What happens if I break my FD early?

Most banks charge a penalty of 0.5-1% on the applicable rate. The interest is recalculated at the rate applicable for the actual period held, minus the penalty.

Are FDs safe? What if the bank fails?

Bank FDs up to ₹5L per depositor per bank are insured by DICGC (a subsidiary of RBI). Corporate FDs are not covered by DICGC — check the credit rating before investing.

What is the difference between cumulative and non-cumulative FD?

Cumulative FDs pay interest at maturity (compounding). Non-cumulative FDs pay interest monthly/quarterly/annually. Cumulative gives higher effective returns.

Can NRIs open FDs in India?

Yes. NRIs can open NRE FDs (tax-free, repatriable) or NRO FDs (taxable in India). Interest rates and terms may differ from resident FDs.

What is a tax-saving FD?

A 5-year FD that qualifies for Section 80C deduction up to ₹1.5L/year. It has a 5-year lock-in — premature withdrawal is not allowed.

Fixed Deposit
4/5
Unity Small Finance Bank logo

Unity Small Finance Bank FD

Unity Small Finance Bank

Unity SFB (formerly Centrum) offers competitive rates post its banking license transformation.

Interest Rate

7.5% p.a.

Senior Citizen

8.0% p.a.

Min Deposit

₹1,000

Tenure

7

Start earning guaranteed returns

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DICGC Insured up to ₹5 Lakh

Interest Rates by Tenure

TenureInterest Rate
1 Year6.8%
2 Years7.0%
3 Years7.25%
5 Years7.5%

* Senior citizens get additional 0.25% - 0.50% on these rates

Key Features

  • High rates
  • Digital banking available
  • DICGC insured

Pros

  • High rates
  • Digital banking available
  • DICGC insured

Cons

  • Newer bank
  • Limited history
InvestingPro Verdict

Unity Small Finance Bank FD

4.0
Interest Rate4.2/10
Safety4.8/10
Flexibility3.9/10
Tax Benefit3.5/10

Unity Small Finance Bank FD from Unity Small Finance Bank offers competitive interest rates of up to 7.5% p.a. for general customers and 8.0% p.a. for senior citizens. With a minimum deposit of ₹1,000 and flexible tenure options, this FD is a solid choice for risk-averse investors seeking guaranteed returns.

Reviewed by InvestingPro Editorial Team

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Eligibility

Minimum Age

18 years

Required Documents:

  • PAN Card
  • Aadhaar Card
  • Address Proof

Safe Investment

Bank FDs are insured by DICGC for up to ₹5 Lakh per depositor per bank.

Frequently Asked Questions

Is FD interest taxable?›
Yes. FD interest is added to your taxable income. TDS of 10% is deducted if interest exceeds ₹40,000/year (₹50,000 for seniors). Submit Form 15G/15H to avoid TDS if income is below taxable limit.
What happens if I break my FD early?›
Most banks charge a penalty of 0.5-1% on the applicable rate. The interest is recalculated at the rate applicable for the actual period held, minus the penalty.
Are FDs safe? What if the bank fails?›
Bank FDs up to ₹5L per depositor per bank are insured by DICGC (a subsidiary of RBI). Corporate FDs are not covered by DICGC — check the credit rating before investing.
What is the difference between cumulative and non-cumulative FD?›
Cumulative FDs pay interest at maturity (compounding). Non-cumulative FDs pay interest monthly/quarterly/annually. Cumulative gives higher effective returns.
Can NRIs open FDs in India?›
Yes. NRIs can open NRE FDs (tax-free, repatriable) or NRO FDs (taxable in India). Interest rates and terms may differ from resident FDs.
What is a tax-saving FD?›
A 5-year FD that qualifies for Section 80C deduction up to ₹1.5L/year. It has a 5-year lock-in — premature withdrawal is not allowed.

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