Fixed deposits (FDs) offer higher interest rates as compared to savings accounts. Bank fixed deposits (FDs) offer compelling interest rates.

Fixed deposits require you make a lump-sum investment for a pre-specified tenure and enable you to earn a fixed interest rate until that given period.

Customers can avail fixed deposits from a minimum of seven days to 10 years.

Interest payout frequencies that a customer can choose with fixed deposits are monthly, quarterly or at maturity (cumulative FDs).

Interest received from fixed deposits is added to the total income and taxed as per the applicable tax slab.

Tax deducted at source (TDS) is also applicable.(: Saving Schemes That Are Just A Click Away - Public Provident Fund Vs Fixed Deposits)Advantages of a fixed depositFixed deposits offer higher returns as compared to savings accounts.

The interest payout options that customers can choose help them with regular cash flows or earn even higher interest rates by opting for cumulative interest where the interest is compounded quarterly, thus providing even better returns.If someone has lump-sum surplus available for investment with a requirement of these funds at a specified date, one may choose to put in to a fixed deposit account, said Puneet Kapoor, Sr.

EVP, Kotak Mahindra Bank."Fixed Deposits have been a traditional avenue as an investment that provides fixed, safe and reasonable returns.

This product gives you a choice to book a deposit for up to 10 years and in a falling interest scenario, one can conveniently opt for a longer tenure and secure returns," Mr Kapoor said.(: Why To Deposit Money In NBFC Fixed Deposits - Interest Rates Offered, Risks Involved)Given below are interest rates on fixed deposit accounts of State Bank of India (SBI), HDFC Bank, ICICI Bank, YES Bank and Kotak Mahindra BankBanksUp to 1 yearUp to 3 yearsUp to 5 yearsSBI6.65%6.70%6.75%HDFC Bank6.85%7%7%ICICI Bank6.60%7%7%YES Bank7.10%7.10%7.10%Kotak Mahindra Bank7.25%6.75%6.50%Small finance banks also offer fixed deposit accounts, the interest rates on which are as high as 9 per cent.

Fixed deposits are also offered by non-banking finance companies, other corporates, and post offices.