New Delhi, May 2 -- Fixed deposits (FDs) remain a popular investment choice for investors seeking stable and predictable returns. As of May 2026, major banks in India are offering interest rates of up to 7% for general depositors, with senior citizens usually receiving an interest of additional 50 basis points. With assured returns and low risk, FDs continue to appeal those who prioritise capital safety over market-linked investments such as equities and mutual funds.

Tax-saving fixed deposits, on the other hand, are a type of term deposit that allow investors to claim deductions of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. These FDs come with a mandatory lock-in period of five years, during which premature withdrawal is...