FD Interest Rates: When public sector banks are in a low interest rate setting, fixed deposits (FDs) can be affected. Even a minor shift in interest rates can greatly influence your investment returns. Since FD returns are tied to the interest rate at the time of investment, a small rise or fall can significantly impact large deposits or long-term maturity amounts. Hence, investors should keep a close eye on the changes in FD rates that banks announce.
There’s fierce competition among private sector banks in India when it comes to FDs. Numerous banks are providing interest rates of 7% or higher on FDs across different tenures, presenting fantastic opportunities for those seeking safe investments. Notably, some banks are even challenging larger banks with their special tenure schemes.
Strong returns on FD in private banks
Certain private banks are offering appealing interest rates of up to 7.20 percent on FDs with tenures ranging from 2 to 3 years. These include Bandhan Bank and RBL Bank. DCB Bank is also providing 7.15 percent interest on FDs with tenures of 60 to 61 months. SBM Bank India offers returns of up to 7.10 percent, while YES Bank, IDFC First Bank, IndusInd Bank, and Jammu & Kashmir Bank have also become solid choices with rates of 7 percent.
Special tenure FDs become investors’ choice
City Union Bank’s 500-day FD provides 7 percent interest. Karnataka Bank’s 555-day FD offers 6.65 percent interest, and IDBI Bank’s ‘Utsav FD’ (700 days) gives 6.50 percent interest. Tamilnad Mercantile Bank’s TMB456 FD (456 days) also provides a 7.10 percent return, making it a great option for those seeking better returns in a shorter timeframe.
Additionally, Axis Bank offers 6.45% interest on FDs with 15 months to 10 years. HDFC Bank also offers 6.45% on FDs with 18 months to 3 years, while ICICI Bank offers 6.50% interest on FDs with 3 years 1 day to 10 years. These banks remain investors’ top choices for stability and reliability.
Strong offerings from mid-sized banks
Federal Bank is offering 6.75% interest on 36-month FDs, DBS Bank is offering 6.60% interest on FDs from 376 to 600 days, and Kotak Mahindra Bank is offering 6.70% interest on FDs from 15 months to less than 2 years. South Indian Bank is offering 6.60% interest on 2-year FDs.
What to keep in mind before investing
When investing in an FD, it’s important to consider not only the interest rate, but also the bank’s financial health, deposit insurance, and the lock-in period. Banks offering high returns are certainly attractive, but it’s wise to assess the risks before investing.