One of the best ways to secure your money is by investing in fixed deposits which not only helps you to save money but also helps you to earn a substantial interest in it. Competitive Bank FD interest rates help the depositor to get a good Return on Investment over a fixed tenure. Under the fixed deposit scheme, the depositor deposits the money only once at the time of opening the account. The interest rates offered depends on the bank, deposit amount and the tenure you choose.
At the end of the tenure, the interest accrued is calculated on the principal amount and the total amount is paid back to the depositor. The tenure of fixed deposits may range from 7 days to 10 years. In the next section, we have enlisted some of the banks that offer competitive interest rates.
Competitive Interest Rates Provided by Banks
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Name
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Tenure
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Highest Interest
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Tax Saving FD
Tax saver FDs are a special type of deposit scheme under which on can get a tax exemption of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961. Some of the features of tax-saving FDs are:
- This account has a lock-in period of a minimum of 5 years
- Premature withdrawal or partial withdrawal option is not provided
- Loans facility against FDs is not available
Fixed Deposit Investment Tips
- Before investing, one should contemplate on the factors such as maturity, rate of interest, penalty on breaking the FD account before maturity.
- Also, do your research regarding the latest trends in interest rates. If you are planning to re-invest when the interest rates go up, opt for a shorter tenure FD and vice versa
- Before proceeding with the final decision, one should go through the tenure-wise interest rate offered. Sometimes, banks may offer higher interest rates on some selected tenures
- Also, the expenses should be planned carefully and invested by making sure that it does not affect your budget
Bank Fixed Deposit Interest Rates – Special Features
- Fixed deposits usually offer higher interest rates and one can get the best fd rates in the bank than a regular savings account.
- A fixed deposit account can be any Indian resident including minors and HUFs
- It allows choosing 2 nominees in the application form that are eligible to collect the FD amount by submitting a valid death proof after the demise of the account holder
- Premature withdrawal is not allowed in fixed deposits, hence you cannot withdraw the deposit amount before maturity. However, one can withdraw the amount in case of an emergency by paying a penalty amount.
- Banks also provide a Sweep-in facility on term deposits, which allows the depositor to interlink his/her savings bank account with a fixed deposit account. The benefit of this facility is that it facilitates the auto-transfer of surplus amounts from the savings account to the FD account. It allows the depositor to earn FD rates on their savings account with an option to break the FD at any point of time and utilize the amount.
- All the banks provide the facility to take loans against FDs to meet any financial emergency. Your deposit acts as the security of the loan taken. One can take a loan up to 75%-95% of the FD amount depending on the bank and the interest rate varies from 1% – 1.5% higher than the FD rate.
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