Which Bank Offers the Best Fixed Deposit Interest Rate?
A Fixed Deposit is an investment product offered by banks and financial institutions that entails a fixed interest rate over a predetermined tenor. One of the many benefits of investment through FDs is that you receive assured returns and faster growth at compounded interest.
If you are risk-averse and looking for a safer investment option to park your money, you can consider FD investments. However, before proceeding, it is crucial for you to know the best bank FD interest rate.
Read on to know more.
Best Interest Rate on FDs Offered by Banks and Financial Institutions
Mentioned below are the banks and NBFCs offering Fixed Deposits at the best interest rates:
|
Bank/NBFC |
FD interest rate for general citizens |
FD interest rate for senior citizens |
|
Bajaj Finance Ltd. |
7.7% |
7.95% |
|
State Bank of India |
5.4% |
6.2% |
|
ICICI Bank |
5.5% |
6.3% |
|
Axis Bank |
5.5% |
6.05% |
|
HDFC Bank |
5.5% |
6.25% |
|
Bank of Baroda |
5.3% |
6.3% |
|
IDFC Bank |
5.75% |
6.25% |
|
IndusInd Bank |
7.0% |
7.5% |
|
RBL Bank |
6.75% |
7.25% |
|
YES Bank |
7.0% |
7.75% |
You can assess these details and compare between different bank FD interest rate on Bajaj MARKETS. This is a diversified marketplace offering a huge range of FD investment options from leading banks and financial institutions of the country. Consider checking the various options available and make decisions as per your financial goals and needs.
Benefits of FDs
Fixed Deposits are a perfect investment tool for individuals looking for assured returns with minimal risk. The various benefits exhibited by this investment product are:
1. Guaranteed returns
As opposed to market-linked securities, FDs provide an assured rate of return on investment. In simple terms, the interest rate on FDs remains unaffected due to changes in market conditions. Thus, your money is safe in FDs, and the returns are higher than in savings accounts.
2. Compounding benefits
With a Fixed Deposit, you can earn interest on interest, resulting in higher returns and faster money multiplication. Most banks and financial institutions offer FDs at compound interest rates. This means you can maximise your returns over a specified time frame. Consider using an online FD calculator to assess the amount of return you can generate in relation to principal amount, tenor and bank FD interest rate.
3. Low minimum investment amount
If you want to start investing but don't have a large sum, FDs are a good option. This is because with FDs, one can start investing with an amount as low as Rs.500. You can look at the different FD options available at different banks to make a conscious decision.
4. Offers liquidity
With FDs, you can withdraw funds from the account before the end of tenor, because premature withdrawal is permitted. However, by doing so, you may lose some interest for the time lost. Overall, this facility provides you with liquidity because you can liquidate the FD case of an emergency.
5. Convenient process
FDs are the most straightforward instruments to invest in. You do not need to go through extended hours of documentation. Instead, you can simply fill an application online by visiting the official website of your preferred bank or financial institution.
6. Balances the portfolio
Fixed deposits can help you balance your portfolio. While market-linked instruments like equities and mutual funds are risky, FDs are not. They are safe investments that provide a guaranteed return over a specified time period.
7. Positive net value of portfolio
FD returns can ensure that the net value of your portfolio remains positive during market lows. This is because the interest received from FDs can recompense for any losses that your market-linked investments may have incurred.
8. Suitable for short-term financial goals
FDs are one of the best investment tools to meet all your short-term financial goals. They are also an excellent investment option for financial objectives where you cannot afford to lose the capital invested.
Apart from that, as evident from the table above, FDs offer attractive interest rates for senior citizens. Thus, coupled with a higher bank FD interest rate and power of compounding, senior citizens can make way for better returns.
Steps to Invest in an FD
As mentioned earlier, investing in FD is a very convenient process. You simply need to follow these steps:
Step 1: Visit the official website of your preferred bank or financial institution
Step 2: Navigate to FD page and open the application form
Step 3: Fill the form with all necessary details and set up your investment account
Step 4: Complete the payment
Upon applying for an FD, you should know that the interest you earn on your Fixed Deposit, or corporate FD is taxable as per the tax slab you fall into.
The bank FD interest rate is one of the most crucial factors to consider before starting your investing journey. Apart from that, consider having a thorough talk with your bank and NBFC relating to the associated costs.