Savings
Kotak fixed deposit interest rates, and what breaking one costs
Kotak’s callable FD rates tenure by tenure, and the two-step recalculation that makes early closure cost far more than the 0.50% or 1.00% penal charge.
Kotak’s callable retail fixed deposit schedule peaks at 6.80% for the general public and 7.30% for resident senior citizens, both at two years to under three years, on the card effective 10 June 2026 and read on 4 September 2026. Everything longer pays less. The number that decides whether the deposit was a good idea, though, is not on the rate card at all: if you close early, Kotak pays the rate that applied on your booking date for the period the money actually stayed, capped at your contracted rate, and only then deducts the 0.50% or 1.00% penal charge.
The callable rate card, tenure by tenure
| Maturity period | General | Resident senior citizen |
|---|---|---|
| 7–14 days | 2.75% | 3.25% |
| 15–30 days | 2.75% | 3.25% |
| 31–45 days | 3.00% | 3.50% |
| 46–90 days | 3.50% | 4.00% |
| 91 days | 4.00% | 4.50% |
| 92–179 days | 4.25% | 4.75% |
| 180 days | 5.00% | 5.50% |
| 181–269 days | 5.50% | 6.00% |
| 270 days | 5.50% | 6.00% |
| 271–363 days | 6.00% | 6.50% |
| 364 days | 6.00% | 6.50% |
| 365 days to under 15 months | 6.35% | 6.85% |
| 15 months to under 18 months | 6.45% | 6.95% |
| 18 months to under 2 years | 6.55% | 7.05% |
| 2 years to under 3 years | 6.80% | 7.30% |
| 3 years to under 4 years | 6.40% | 6.90% |
| 4 years to under 5 years | 6.40% | 6.90% |
| 5 years to 10 years | 6.25% | 6.75% |
Two dates govern that table: Kotak’s own effective date of 10 June 2026, and the day we read it, 4 September 2026. It is the domestic, NRO and NRE schedule for deposits below ₹3 crore on which premature withdrawal is allowed, and the senior-citizen column does not apply to NRO or NRE deposits. Excluded, each with its own card and its own effective date: the non-withdrawable table, repriced 1 September 2026; the bulk callable table from ₹5 crore upwards, repriced 3 September 2026; and ActivMoney, Kotak’s two-way sweep. Acceptance of deposits of ₹5 crore and above is at the bank’s discretion; the minimum is ₹5,000 and there is no maximum.
One caution about the headline. On the day we read it, the page’s own title advertised “Up to 7.20% p.a.” — a figure no row in any of the three tables on that page actually pays. The general-public maximum is 6.80% and the senior maximum is 7.30%. Read the row, not the banner.
Two one-day cliffs, and a peak at two years
The short end of the curve has two places where a single day is worth half a percentage point. A 180-day deposit earns 5.00%; a 181-day deposit earns 5.50%. A 270-day deposit earns 5.50%; a 271-day deposit earns 6.00%. If the money is not needed for about six or about nine months, booking 181 or 271 days rather than the round number costs nothing and pays half a point more, and no booking screen will point it out.
At the long end the curve turns over. The peak is 6.80% at two years to under three years; three years and beyond pays 6.40%, and five to ten years pays 6.25%. Locking money away for a decade earns 55 basis points less than locking it for two.
The senior uplift on this schedule is a flat 0.50 percentage point on every row, which is worth stating rather than assuming, because not every bank applies it evenly across tenures. Two limits on it: it does not apply to NRO or NRE deposits, and in the ₹3 crore to under ₹5 crore column the senior rate equals the general rate, so within that band the uplift disappears. Our maintained fixed deposit interest rates comparison sets Kotak’s peak against six other large banks at the tenor each one actually pays it.
The rate you contracted for is not the rate that gets paid
This is the mechanism the rest of the page turns on, and it appears both on the rate page and in Kotak’s Policy on Bank Deposits. On premature closure, interest for the period the deposit remained with the bank is paid at the rate prevailing on the date of deposit for that period — not at the contracted rate. The rate page adds two refinements: that substituted rate is compared with the contracted rate and the lower of the two is used, and the penal charge comes off after that. The same treatment applies to the withdrawn portion of a partial closure.
The ordering is the expensive part. Most people assume it runs contracted rate, minus penalty; it in fact runs booking-date rate for the period actually run, capped at the contracted rate, minus penalty.
The published penal charges, for deposits booked or renewed on or after 20 May 2022, are:
| Tenure of fixed deposit | Penalty |
|---|---|
| Less than or equal to 180 days | Nil |
| More than 180 days to 364 days | 0.50% |
| 365 days or more | 1.00% |
An older slab still governs anything booked or renewed between 1 November 2012 and 19 May 2022 — nil below 181 days and 0.50% at 181 days and above, with no 1.00% band at all. For erstwhile ING Vysya customers that slab starts on 1 April 2015 instead. A five-year deposit opened in early 2022 has not matured yet, and it sits on the cheaper table.
The substitution is not a Kotak peculiarity. The Reserve Bank’s Directions require that on premature withdrawal interest is paid at the rate applicable to the period for which the deposit remained with the bank and not at the contracted rate, and leave the penalty to each bank’s Board-approved policy — with the rider that if the components of the penalty were not disclosed when the deposit was accepted, no penalty may be levied. Between banks the penalty differs. The substitution does not.
What breaking a ₹5,00,000 deposit really costs
Take ₹5,00,000 placed in a two-year callable deposit at 6.80% and closed at ten months — 304 days. That period falls in the 271-to-363-day bucket, which pays 6.00%, and in the 0.50% penal band.
| Step | Rate applied | Interest on ₹5,00,000 for 304 days |
|---|---|---|
| Contracted two-year rate, pro rata | 6.80% | ₹28,318 |
| Substituted booking-date rate for 271–363 days | 6.00% | ₹24,986 |
| After the 0.50% penal charge | 5.50% | ₹22,904 |
The shortfall against the contracted rate is ₹5,414. Of that, ₹2,082 is the penalty — the number the rate card invites you to budget for — and ₹3,332 is the rate substitution, which the rate card does not quantify anywhere. The real cost is 2.6 times the advertised one, and the larger share of it never appears in the penalty column.
That arithmetic is tied to this card rather than to Kotak generally, in two ways. The substitution uses the card in force on your booking date, so these figures are exact only for a deposit booked on or after 10 June 2026; if Kotak’s short-tenor rates differed when you booked, substitute that row. And it uses simple interest on Kotak’s own stated basis of 365 days in a non-leap year, which slightly understates a cumulative deposit without changing the ordering. Tax is ignored. The FD Interest Rates Calculator holds principal and tenure constant while you vary the rate.
Two consequences follow from the same clause. If the deposit was non-cumulative and had already paid interest out monthly or quarterly at the contracted rate, the recalculation applies to money already credited to your account, so the amount finally released can be less than principal plus recalculated interest suggests — ask the branch for the net figure before authorising the closure. And if the short-tenor rate on your booking date happened to be higher than your contracted rate, the cap means you do not benefit: you get the contracted rate, less the penalty.
Two readings of the penalty table, and neither is spelled out
The penal-charge table is headed “Tenure of Fixed Deposit”. It does not say whether that means the period the deposit actually ran or the tenure originally contracted, and nothing else on the page settles it.
The distinction is not academic. A two-year deposit closed at ten months has run for 304 days, which falls in the 0.50% band, but was contracted for 730 days, which falls in the 1.00% band. On ₹5,00,000 for 304 days that is a difference of ₹2,082 — as much again as the entire penalty under the first reading.
The sentence immediately above the table uses “tenure” to mean the period the deposit remained with the bank, which points towards the run-period reading. That is an inference from wording, not a statement of the rule, so put the question to the bank before booking and write the answer into your own note of the transaction.
Breaking one deposit to rebook is the same transaction twice
Kotak’s deposit policy treats premature renewal exactly as it treats premature closure: the existing deposit is closed, interest on it is recomputed at the booking-date rate for the period it ran, the penalty is levied, and the new deposit is booked at the rate applicable on the day of rebooking.
So the arithmetic of chasing a rise is not “new rate minus old rate”. It is the improvement, spread over however long the new deposit runs, set against the full ₹5,414 shortfall above. A deposit ten months into a two-year term needs a large move on the remaining fourteen months to recover a shortfall taken on the first ten. The comparison across banks is worth doing at booking, when it costs nothing.
One exception is worth knowing: the policy provides that no premature-withdrawal penalty is levied where depositors of a branch seek premature withdrawal because the business of that branch has been transferred to another bank.
The non-withdrawable schedule does not reach retail
Non-withdrawable deposits pay more, which is the point of them, and most writing on the subject frames that as a choice the depositor makes. At Kotak it is not one. The smallest amount column on the non-withdrawable table begins at ₹3 crore, every cell in that column reads NA, and the first live figures appear at ₹5 crore and above. A retail depositor cannot buy this product, and the Reserve Bank’s ₹1 crore rule means no individual below that threshold could be sold one anyway.
For anyone who does reach the schedule, the disclosures are worth reading, because the higher rate removes more than early exit. Kotak states that it will not extend any facility, including an overdraft, against a deposit booked under the no-premature-withdrawal scheme; that auto-renewal and the monthly interest payout option are unavailable; and that ActivMoney and sweep-in cannot be attached. The deposit policy adds that these deposits cannot be closed by the depositor before maturity at all, reserving early closure for a direction from a statutory or regulatory body, an internal operational error, or a deceased-claim settlement.
That matters because borrowing against a callable deposit is usually the better answer to a temporary cash need than breaking it. An overdraft leaves the contracted rate running and charges a spread on what you actually draw, for the weeks you actually need it — frequently less than a permanent rate substitution plus a penalty on the whole principal. Our guide to a loan against FD works through where that trade stops being worth it.
ActivMoney is the trap that does reach retail. Kotak’s rate page states that for ActivMoney two-way sweep deposits, regular fixed deposit rates apply to all customers including senior citizens and bank staff — the uplifts do not attach to swept balances. Swept balances earn the regular FD row for however long they stay, which at the short end of this card is 2.75%. Treat ActivMoney as a liquidity arrangement, not as the vehicle for money you were going to lock away anyway.
Tax, insurance, and the deposits you cannot break at all
Two Kotak products cannot be broken early at any price. The rate page states that premature withdrawal is available except on a tax-saving or a non-withdrawable FD, so the five-year tax-saver is a genuine lock rather than an expensive one. Separately, an NRE term deposit that stays less than a year pays no interest whatsoever — not a reduced rate, none — which makes a short-dated NRE deposit a different decision from the rupee equivalent. If you take the monthly interest payout on any deposit, note that Kotak pays it at a discounted rate for payment periods shorter than a quarter.
Interest is taxable at your slab rate as it accrues each financial year, including on a cumulative deposit that pays out nothing until maturity. Breaking the deposit does not undo tax already accrued in an earlier year — it changes the amount of interest, not the year it belonged to. Where tax was deducted at source on interest the recalculation later reduces, the credit and the final liability are reconciled at filing, not at the branch counter. Thresholds and rates sit on our page covering tax on FD interest.
Safety is a separate question from return. Cover under DICGC deposit insurance is ₹5 lakh per depositor per bank across all deposits held in the same right and capacity, not ₹5 lakh per deposit, so several Kotak FDs share one limit. Retirees weighing this schedule against a government alternative should read our SCSS versus FD comparison.
Which row applies to you
| If you are | The row that applies | What to settle before booking |
|---|---|---|
| A general depositor, money genuinely idle | 2 years to under 3 years, 6.80% — nothing longer pays more | Whether you can leave it for the full two years |
| A resident senior below ₹3 crore | The same row at 7.30%; the uplift is a flat 0.50 point on every bucket | That you are 60 on the booking date, and — on a joint deposit — whether Kotak requires the senior to be first holder |
| Holding ₹3 crore to under ₹5 crore | The general rate is unchanged, but the senior uplift disappears | Whether two deposits below ₹3 crore are open to you instead |
| Parking cash for about six or nine months | 181 days at 5.50%, or 271 days at 6.00% | That the booking screen shows 181 or 271 days, not 180 or 270 |
| Facing a temporary need on a running deposit | Overdraft against the deposit | The spread charged, against the ₹5,414-per-₹5-lakh shape of a closure |
| Watching rates rise after booking | Usually wait for maturity | Rebooking is a full recalculation plus a penalty, then today’s rate |
| Holding a balance in ActivMoney | Treat it as liquidity, not as your best rate | Regular FD rates apply, with no senior or staff uplift |
Four things to establish on the booking screen and keep: the contracted rate and maturity date, the exact number of days the deposit runs, whether the penal-charge band is read on the period run or the tenure contracted, and the net credit if the deposit were closed early with interest already paid out. The first two are on every receipt. The last two decide what an early exit costs, and neither appears next to the rate.
Common questions
Which Kotak FD tenure pays the highest interest rate?
On the callable schedule for deposits below ₹3 crore, effective 10 June 2026 and read on 4 September 2026, the peak is two years to under three years: 6.80% for the general public and 7.30% for resident senior citizens. The curve does not keep rising after that. Three years to under five years pays 6.40%, and five to ten years pays 6.25%, so a longer lock earns less. Confirm the rate on the booking screen, because the card changes without notice.
Is there really no penalty if I close a Kotak FD within 180 days?
The penal-charge table shows nil for 180 days or less, but nil penalty is not the same as no cost. Interest is still recomputed at the rate that applied on your booking date for the period the money actually stayed, and the short buckets pay very little: 2.75% for 7 to 30 days and 5.00% at 180 days, against a contracted two-year rate of 6.80%. That substitution happens whatever the penalty column says.
Can I borrow against a Kotak non-withdrawable FD instead of breaking it?
No. Kotak’s deposit policy states that no credit facility can be provided against the security of a non-premature-withdrawal deposit, and the rate page repeats it: the bank will not extend any facility, including an overdraft, against a deposit booked under the no-premature-withdrawal scheme. A callable deposit keeps both exits open — you can break it, or raise a loan or overdraft against it and leave the contracted rate running.
Is the premature-withdrawal penalty charged on the interest or on the principal?
Neither, strictly. It is a deduction from the rate, not a flat fee: the applicable rate is reduced by 0.50 or 1.00 percentage point and interest is then computed at the reduced rate. So the rupee cost rises with both the principal and the time the deposit ran, and it is applied after the rate has already been substituted for the period the money actually stayed. Two deductions, in that order.
Can a bank sell me a non-withdrawable fixed deposit of ₹5 lakh?
Not as a retail individual. Under the Reserve Bank’s deposit-interest Directions for commercial banks, every term deposit accepted from individuals, singly or jointly, for ₹1 crore and below must carry a premature withdrawal facility. Kotak’s own non-withdrawable table goes further: its smallest amount column starts at ₹3 crore and shows no rate at all until ₹5 crore. For a retail depositor the callable schedule is the only schedule.
Will auto-renewal keep my original rate?
No. On renewal the deposit takes the rate applicable on the maturity date for the tenure you have chosen, not the rate you originally contracted. Kotak’s deposit policy also provides that where no maturity instruction exists, the deposit goes overdue and earns the savings rate or the contracted rate on the matured deposit, whichever is lower. Treat every maturity as a fresh decision and set the instruction before the date, not after.
Sources
Rates and rules on this page were read directly from the following sources on the dates shown. Figures change — if you are about to act on one, confirm it at the source.