Fixed deposit is nothing but an investment option in which you can deposit your lump sum money amount in the bank or with any other non-banking financial institution.
The bank, small finance bank or non-banking financial institution offers an interest on the amount deposited, and you will earn interest according to the maturity of your fixed deposit. Most banks and non-banking financial institution allow fixed deposit period of 7 days to 10 years
Many people consider fixed deposits as the most secure form of investment. You just have to keep your money with the bank and earn interest. However, the returns on fixed deposit are usually less than other forms of investment. People choose it over other investments to avoid losing money.
Once you have deposited the money, it is not affected by any market fluctuations. For instance, if you open a fixed deposit of INR 50,000 with an interest rate of 7.2% per annum, then even if the interest rate decreases in coming months, it won't affect your interest rate.
Let's analyze a few fixed deposit schemes that offer more interest rate:
1. Fincare Small Finance Bank FDs
This is a small finance bank, that was granted RBI license, a couple of years ago by the RBI.
• If you invest your money in fixed deposit for 2 years 1 day to 3 years, you'll receive an interest rate of 9.00% per annum.
• Senior citizens can avail extra benefits with interest rate of 9.50% per annum.
• Nomination and joint account provision is available
2. Bajaj Finance FDs
a) This is a AAA rated FD that is from the Bajaj Stable.
b) Investors can receive a interest rate of 8.10 per cent for 36 months to 60 months.
c) One can opt for a cumulative as well as non cumulative FD.
The deposits here are backed by the government of Kerala and hence are very safe. It is a government of Kerala owned entity.
• KTDFC has one of the highest deposit paying schemes in India with 8.25% per annum.
• For senior citizens, it offers return rate of 8.75% per annum.
• Various interest pay out options are also available.
4. Suryoday Small Finance Bank
This is another small finance bank that was granted license by the RBI recently.
• For non-senior citizens, Suryoday Small Finance Bank offers 8.75% per annum return rate on a 24 to 36 months deeposit.
• Suryoday provides quarterly interest benefit as well.
• If you want to deposit more than Rs 1 crore, then you will have to visit the bank.
5. Dewan Hosuing
• This is a corporate FD, where you get an interest rate of 8.05 per cent per annum for 24 to 36 months.
This scheme has a credit rating as per AAA by CARE. This is the highest safety rating accorded. Renewals, senior citizens and other special category of investors can avail another 0.25 per cent extra interest.
6. LIC Housing Finance Ltd
• To non-senior citizens LIC Housing Finance, offers 7.45% per annum of interest rate.
• To senior citizens, it offers 8.00% per annum of return rate.
• Interest is compounded on yearly basis, and you can seek non-cumulative or cumulative deposits.
7. Utkarsh Small Finance Bank
• Uttkarsh Small Finance Bank offers you an interest rate of 8.50 per cent for deposits from 456 days to 2 years.
• There is no maximum limit for fixed deposit.
• Penalty is applied if you withdraw deposit before date of maturity.
8. Ujjivan Small Finance Bank
- Ujjivan Small Finance Bank offers an interest rate of 8 per cent on 1-2 year tenure deposits. These are pretty decent, considering the present low interest rate regime.
- A TDS is applicable on interest rates over and above Rs 10,000.
- However, if you submit form 15G and 15H, in case you are not liable to pay tax income tax, there is no TDS.
Most of the bank mentioned above are small finance banks, where you can open a FD online. Small Finance Banks are regulated by the RBI and have been provided license by them and hence can be considered as safe.
You should note that in all cases, there is a TDS that is applicable on these deposits.