Editorial Team
3 mins read • 23 Dec 2025
Let's take a look at the various types of Fixed Deposits offered by banks.
Domestic vs. Non-Resident: A basic distinction is between domestic deposits placed by resident Indians in Indian Rupee and deposits placed by Non-Residents. Deposits placed by Non-Residents can be in Indian Rupee or in Foreign Currency. Non-Resident Ordinary (NRO), Non-Resident External (NRE) are deposit types placed by Non-Residents in Indian Rupee. Foreign Currency deposits by Non-Residents are allowed under the Foreign Currency Non- Resident Accounts Banks - FCNR(B) Scheme. Non-Resident Deposits are governed by the Foreign Exchange Management (Deposit) Regulations and other guidelines issued by the Reserve Bank of India.
Did you know?
For resident Indian Senior Citizens, Super Senior Citizens and members of their own staff, banks typically offer interest rates which are 0.50% to 1.00% per annum higher than those offered to the general public. Since these terms can vary, please consult the deposit rate chart and detailed terms and conditions before deciding to invest with a bank.
Cumulative vs. Non-Cumulative: Cumulative variants of Fixed Deposits allow you to earn interest on interest and take advantage of the power of compounding. In a cumulative deposit, interest for a partiular period, say a quarter, is added to the principal at the end of the quarter. In the next quarter, interest is calculated on the principal + interest accumulated till the previous quarter. In non-cumulative deposits, interest earned for a particular period, say a quarter or month, is transferred to the Savings Account of the depositor making them a good option for periodic income needs. Cumulative Deposits are also called Reinvestment Deposits since interest, as and when due, is reinvested at the same contracted rate till maturity and becomes withdrawable with the principal amount on maturity date.
Recurring Deposit: Recurring Deposits are like Mutual Fund SIPs because you can invest a fixed installment amount periodically (usually monthly) for a fixed tenor. The installment amount, number of (monthly) installments, the rate of interest and the maturity date are decided upfront. Unlike Mutual Funds SIPs, you get a guaranteed return from Recurring Deposits since the contracted rate of interest is known upfront.
Tax Saver Deposit: Tax Saver Deposits allow individuals to claim tax deduction up to Rupees 1.5 Lakh annually on the invested principal amount under Section 80C of the Old Income Tax Regime. There is a mandatory five-year lock-in period, during which pre-mature withdrawal or loans against the deposit are not allowed. There is no auto-renewal facility.
Jargon Buster:
Callable vs. Non-Callable: Callable Fixed Deposits are those where banks allow pre-mature withdrawal, often with an associated penalty which can range between 0.50% to 1.00% per annum. Non-callable deposits are those where pre-mature withdrawal is not allowed. Since banks are sure that there will be no pre-mature withdrawal, they offer better interest rates for non-callable deposits. As a depositor, you can earn a higher interest income by investing in non-callable deposits only if you are absolutely sure that you will not need the money till the deposit maturity date. Callable deposits, on the other hand, offer flexibility at a cost and are useful for emergencies.
Did you know?
Currently, the Reserve Bank of India requires banks to offer the facility of pre-mature withdrawal for all Fixed Deposits accepted from individuals (held singly or jointly) for amounts of Rupees 1 Crore and below.
Bulk Deposits: The Reserve Bank of India defines Bulk Deposits as a single Fixed Deposit in Indian Rupee with the amount of deposit being Rupees 3 Crore and above. As a corollary, Fixed Deposits below Rupees 3 Crore are sometimes referred to as "Retail" Deposits. Banks may offer differential (higher) rates of interest on Bulk Deposits.
Important Note:
Our site lets you compare across banks and tenors the fixed, simple rate of interest per annum offered to the general public (non-Senior Citizen) for domestic deposits less than Rupees 3 Crores where pre-mature withdrawal is allowed.