As an investor, the primary key factor that’s always of concern to you is the return on investment that you’ll be receiving for your investment. Even though there are quite a few investment options available, fixed deposits still remain a preferred choice, particularly when it comes to availing guaranteed returns. The latest fixed deposit interest rates are something that you cannot afford to miss as it might provide you with opportunities for higher returns on your investments.
Fixed deposits have always been a popular investment option due to its safety and security. It is an investment vehicle that comes with either a fixed interest rate or a floating interest rate. A fixed interest rate, as the name suggests, remains constant throughout the deposit’s tenure. A floating interest rate, on the other hand, isn’t fixed and may change as per the market scenario. This makes fixed deposits a low-risk and reliable investment option for those seeking guaranteed returns, especially for investors who are averse to market risks and volatility.
Irrespective of the type of fixed deposit, the interest rate is the primary factor that determines the expected returns on investment. There are a few other factors that might influence the returns as well, and some of them include the deposit tenure, the amount invested, and the interest rate on offer.
Let’s take a closer look at a few of the most popular banks and financial institutions, and their latest fixed deposit interest rates.
1. ICICI Bank: ICICI Bank is one of India’s leading private sector banks and has always been a favorite among fixed deposit investors. Its fixed deposit offers competitive interest rates with flexible tenures. Here are the current interest rates on offer:
Tenure (in months) Interest Rates for Regular Citizens (per annum)
7-14 4.50%
15-29 4.75%
30-45 5.00%
46-60 5.50%
61-90 5.50%
91 days – up to 6 months 5.00%
6 months 1 day – 9 months 5.40%
9 months 1 day – 12 months 5.50%
1 year – 389 days 5.65%
390 days – 2 years 5.75%
2 years 1 day – 3 years 5.80%
3 years 1 day – 5 years 5.85%
5 years 1 day – 10 years 5.90%
Senior citizens are eligible for an additional interest rate of 0.50% on the above rates.
2. State Bank of India (SBI): SBI is one of India’s largest banks, and fixed deposits are among its most popular investment products. Here are the current interest rates on offer:
Tenure (in months) Interest Rates for Regular Citizens (per annum)
7-45 4.50%
46-90 5.25%
91-179 5.25%
180 - 210 days 5.80%
211 days – up to 1 year 5.80%
1 year – less than 2 years 5.85%
2 years – less than 3 years 5.90%
3 years – less than 5 years 6.00%
5 years and up to 10 years 6.10%
Senior citizens are eligible for an additional interest rate of 0.50% on the above rates.
3. HDFC Bank: HDFC Bank is the largest private sector bank in India and has an extensive network across the country. Here are its current interest rates on fixed deposits:
Tenure (in months) Interest Rates for Regular Citizens (per annum)
7 - 14 days 3.50%
15 - 29 days 3.50%
30 - 45 days 4.00%
46 - 60 days 4.50%
61 - 90 days 4.50%
91 days - 6 months 4.90%
6 months 1 day - 9 months 5.10%
9 months 1 day- less than 1 year 5.50%
1 year - less than 2 years 5.60%
2 years 1 day - less than 3 years 5.65%
3 years 1 day - less than 5 years 5.75%
5 years 1 day - 10 years 5.75%
Senior citizens are eligible for an additional interest rate of 0.50% on the above rates.
4. Axis Bank: Axis Bank is another popular private sector bank in India that offers a wide range of fixed deposit options to its customers. Here are its current interest rates on fixed deposits:
Tenure (in months) Interest Rates for Regular Citizens (per annum)
7-14 3.50%
15-29 4.00%
30-45 4.50%
46-60 5.00%
61-90 5.00%
91 days - 6 months 5.10%
6 months - 9 months 5.25%
9 months – less than 1 year 5.40%
1 year - < 1 Year 5 Days 5.40%
1 Year 5 Days - < 1 year 11 months 5.50%
1 year 11 months - 10 years 5.50%
Senior citizens are offered an additional 0.50% interest rate on some of these schemes.
By studying the above tables, it’s quite evident that banks like ICICI, SBI, HDFC, and Axis have fixed deposit interest rates roughly in the same range. However, SBI seems to have an edge in the interest rate being offered to its customers. It really depends on the deposit tenure that you prefer, and it’s always advisable to consult with a financial expert or an investment advisor before making a decision about investments and can calculate it by referring fixed deposit interest calculator.
Off late, a few financial institutions have started offering a flexible interest rate on fixed deposits. For example, DBS Bank's Multiplier Fixed Deposit offers a flexible interest rate linked to your account’s balance and transactions, which is ideal for those seeking higher returns on their investment.
Factors to consider when investing in fixed deposits
Fixed deposits might appear to be a straightforward investment product, but there are still a few factors that you must consider before investing in them.
1. Deposit interest rates:The interest rate offered by the bank is the primary factor determining the expected return on investment. Study the interest rates offered by different banks before investing, and pick a bank that offers the highest interest rate for your chosen tenure.
2. Deposit tenure: Fixed deposits come with tenures ranging from seven days to ten years. You can select the tenure based on your financial goals and the amount of money you have available. The longer the tenure, the higher the interest rate is likely to be.
3. Minimum deposit: Each bank has its own minimum deposit requirement for fixed deposits. Make sure that you’re aware of the bank’s minimum limit before investing.
4. Premature withdrawal policy: In case you need to withdraw your deposit before its tenure ends, there might be a premature withdrawal penalty charged, which could impact your returns. It’s always better to be aware of the penalty amount and the terms and conditions of premature withdrawal before investing.
5. Tax implications: Interest earned on fixed deposits is taxable as per the income tax laws in India. Consider the tax implications before investing, particularly if you're in a higher income tax bracket.
Conclusion
Fixed deposits have been a popular investment option for many decades, mainly due to their guaranteed returns, low risk, and safety. Several banks and financial institutions offer competitive interest rates on fixed deposits, including ICICI Bank, SBI, HDFC Bank, and Axis Bank, among others. While making an investment in a fixed deposit, it’s essential to consider several factors like interest rates, deposit tenure, minimum deposit, premature withdrawal policy, and tax implications. With the right investment strategy and expert guidance, fixed deposits can provide you with an opportunity for higher returns on your investments whilst offering a relaxed and peaceful investment experience.
Comments
0 comment