5 reasons to opt for the IDBI Bank 500 day fixed deposit

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    Interest rates have edged lower in the last few months and getting decent returns to beat inflation is now becoming a herculean effort. Here are 5 reasons to invest in the IDBI Bank 500 day deposit.

    Comparatively higher interest rates

    Comparatively higher interest rates

    The 500 day deposit fetches you an interest rate of 9.3 per cent, which is the highest among PSU banks.

    Though you may find interest rates slightly higher at cooperative and the smaller private banks, those are not government owned banks.

    Interest rates may fall going ahead

    Interest rates may fall going ahead

    Since you are investing for almost 18-months, you are hedging against falling interest rates. It is largely anticipated that interest rates in the economy would drop and hence you would continue to get 9.3 per cent, even if interest rates dip.

    High safety

    High safety

    IDBI Bank is a government owned entity and hence the safety on re-payment of interest and principal is very high.

    Yields would be higher since compounding is done every quarter

    Yields would be higher since compounding is done every quarter

    Some company fixed deposits offer higher interest rates, but they do not compound every quarter resulting in lower yields. However, banks compound interest rates every quarter thus pushing yields higher.

    Easy liquidity

    Easy liquidity

    Bank fixed deposits are highly liquid and perhaps the most liquid when compared to company fixed deposits, shares and other saving instruments. This makes the IDBI Bank 500 day deposit extremely attractive.

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