2 Banks That Still Offer 7% Interest On Fixed Deposits

The era of high interest rates on bank fixed deposits is over. The maximum interest rate you get from the country's largest lender State Bank of India is 5.4 per cent on a regular deposit. A regular deposit from HDFC Bank fetches a maximum interest rate of 5.5 per cent, while similar is the case with ICICI Bank.

Bank Fd interest rates and how they compare?

Bank Fixed deposits	Interest rate
ICICI Bank regular deposits	Maximum 5.5%
SBI Regular Deposits	Maximum 5.4%
Hdfc Bank Regular Deposits	Maximum 5.5%
IndusInd Bank Regular Deposits	7%
Yes Bank Regular Deposits	7%

We have not compared the interest rates from the small finance banks and have taken only the full-fledged commercial banks in the country. From the table above, it is clear that the two banks that offer the highest interest rates currently are IndusInd Bank and Yes Bank. The interest rates move higher to 7.5 per cent, if you consider the fixed deposits for senior citizens.

IndusInd Bank has various tenures and the 7 per cent interest rate comes for deposits between 1 to 3 years on a regular deposit. In the case of Yes Bank too, the tenure from 1 to 3 years gives an interest rate of 7 per cent.

Should you invest in these Fds?

Bank Deposits up to Rs 5 lakhs are insured by the Deposit Insurance and Credit Guarantee Corporation of India. This is wholly owned subsidiary of the Reserve Bank of India. So, if you have deposits that are under Rs 5 lakhs, you are safe, given the insurance. However, we all know the hassles involved with insurance claims.

There have been instances, where there have been cases where some of the smaller banks like PMC have gone bust, while larger banks like Yes Bank have had their share of problems. However, government has intervened and we have not seen larger banks go bust. Having said that we are living in uncertain times, and the Covid-19 situation is likely to increase the non performing assets of banks. This may result in stress for the banking sector and hence caution is advised.