What is the Maximum Amount that I can Put in a Fixed Deposit?

Fixed deposits (FDs) have long been a favoured investment option for the individuals seeking stable returns and secure their savings. However, one of the most common queries that many investors have is regarding the limit on the maximum FD amount. 

 

The answer to this query is simple. There is no maximum limit on the amount that can be deposited in an FD. However, it’s crucial to understand that the highest FD amount limit that one can invest is subject to various factors, primarily determined by the policies of the FD issuer. 

Let’s take a look at some factors that determine the maximum amount for FD you can invest: 

1. FD Issuer Policies

Typically, more established FD issuers set a higher fixed deposit limit compared to small banks or NBFCs. Moreover, these issuers establish their own guidelines and policies regarding the maximum limit, which can vary widely. 

2. Interest Rates and Tenure

Interest rates and chosen tenures typically determine the maximum amount you can invest in a fixed deposit. The maximum deposit limit may differ across issuers for short-term and long-term FDs. 

 

If you are planning to deposit a substantial amount, you may benefit from longer tenures that offer higher FD interest rates. 

3. Regulatory Guidelines

Regulatory bodies like the Reserve Bank of India (RBI) set guidelines to ensure the financial stability, transparency, and consumer rights are protected. They usually set the maximum FD limit that can be invested. This helps prevent concentration of funds in any single institution and reduce systemic risks.

 

These regulations also aim to ensure fair practices, prevent predatory pricing, and protect consumers from excessive interest rate fluctuations. 

 

In India, the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides insurance coverage for bank deposits up to ₹5 Lakhs per depositor.

Here are the list of maximum limit on fixed deposit allowed in banks, categorised according to different sectors:

Public Sector Banks

If you plan to deposit a large sum in an FD, you must learn the tax implications accordingly. Interest earned from FDs are subject to Tax Deducted at Source (TDS) of 10%. If the interest exceeds ₹40,000 (non-senior citizens) or ₹50,000 (senior citizens) in a financial year, TDS will be applicable. 

 

This means that the bank deducts TDS before crediting the interest to your account. It's important to note that the interest earned from FDs is added to your total income for the year and taxed as per your income tax slab. Therefore, you need to declare the interest earned from FDs in your income tax return and pay tax accordingly. It's advisable to consider the TDS deducted while calculating your total tax liability for the financial year.