There's only bad news for folks who depend on interest income for survival, particularly individuals who are retired. Interest rates on fixed deposits keep falling and a host of banks have now dropped interest rates by at least 0.50 per cent to 1 per cent in the last six months.

In case of banks, do not bother if you do not have a branch of the bank mentioned in the area as you can apply online.

Ratnakar Bank

A 24 month deposit at Ratnakar Bank offers you an interest rate of 9.10 per cent. For senior citizens the interest rate on a 24-month deposit is a huge 9.60 per cent. For a period ranging between 36-60 months Ratnakar Bank offers an interest rate of 9.00 per cent and 9.50 per cent for senior citizens. Considering that the interest rate is compounded quarterly the returns can be pretty high.

In case there is no branch of Ratnakar Bank, one can open an on line by visiting here

KTDFC

KTDFC is a government of Kerala Organisation, which makes your deposits very safe. A 1, 2 and 3 year deposit attracts an interest rate of 9.75 per cent and 10 per cent for senior citizens. The deposits are guaranteed by the government of Kerala. The interest rates are almost 1.5 per cent higher than most government owned banks, hence making them very attractive.

Also read how to save TDS on fixed deposits here

Mahindra Finance Fixed Deposits

Mahindra Finance is among the few institutions that are still offering an interest rate in excess of 9 per cent. For tenures ranging from 18 months to 60 months the institution is offering an interest rate of 9.25 per cent. Senior citizens are entitled to an interest rate of 0.25 per cent extra over the rates mentioned above.

At the moment there are very few banks that offer interest rates in excess of 9 per cent. So, you can look at a company fixed deposits like Mahindra Finance, which has a solid pedigree coming from the Mahindra stable and a good AAA rating.

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