If you are looking at Fixed Deposits (FDs) in a falling interest rate regime, you will have to pick and choose. Bank interest rates have dipped a great deal and chances are they would slip even further. Here are a few FDs that could still be attractive from a long term perspective:
At an interest rate of 8.5 per cent per annum, this has to be your obvious choice. This is a government of Kerala backed entity and that too which is financially sound. The deposits are guaranteed by the government of Kerala. So, there are no worries on the safety count and this is a great opportunity before interest rates decline any further. The interest rate of 8.5 per cent is across various tenures.
If you are looking at a bank deposit, it has to be IDFC Bank. With an interest rate of around 8.25 per cent across tenures, you can go for this one, if you are looking at bank deposits. The 366-400 day deposit fetches you this interest rate, while a 401 to 500 day deposit gives you an interest rate of 8 per cent. For senior citizens the interest rate can go as high as 8.75 per cent, which is not bad in the present low interest rate environment.
If you are in the highest tax bracket, you should not miss the Public Provident Fund or PPF. The post office scheme offers you an interest rate of 8 per cent, which gives you the best post tax yield. This is because, interest rates on PPF are tax free in the hands of investors. Not only that, you also get tax benefits under Sec 80 C of the Income Tax Act.
The interest rates on the Bajaj Finserv FDs at 8.25 per cent is also not too bad. If you deposit in excess of Rs 1 crore, you get an extra 0.10 per cent as interest. Senior citizens on the other hand are entitled to an extra interest rate of 0.25 per cent. This is another place where you are likely to see good returns from your fixed investment.
Shriram Transport FD
You can get a yield of as high as 10.06 per cent on a 5-year deposit at Shriram Transport Finance. The cumulative deposit fetches you an interest rate of 8.19 per cent with monthly rests, which is why the yield moves extremely high. The deposits are rated AAA and hence rather secure.
If you are looking at a 1-year deposit, Bandhan Bank would be the right place to park your money. This is because it has got the best interest rate of 8 per cent on a 1-year deposit. Below 1-year the interest rates of the bank are not very attractive.
Mahindra and Mahindra Fixed Deposit
The Mahindra and Mahindra Fixed deposit offers you an interest rate of 8.05 per cent. The deposits are AAA rated.
7 FDs That Offer The Best Interest Rates In India
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