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. You should also remember that your returns get reduced if your interest income is subject to tax. Here are a few FDs that could still be attractive from a long term perspective:
It is extremely difficult to get interest rates of 8 per cent in the current low interest rate regime, that too from a foreign bank. Deutsche Bank offers an interest rate of 8 per cent on a 5 year deposit. A 1-2 year deposit fetches an interest rate of 6.90 per cent only. So, the only option at Deutsche Bank would be the 5 year tenure. Interestingly, there is no difference in interest rates for senor citizens who also get an interest rate of 8 per cent only. This is a German bank and the deposits can be considered as safe.
At an interest rate of 8.25 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 is 8.25 per cent for 1, 2 and 3 years. The interest rates drop to 8 per cent for the 4 and 5 year tenure. Senior citizens are entitled to an extra 0.25 per cent interest.
Suryoday Small Finance Bank
Suryoday Small Finance Bank is offering a huge interest rate of 9 per cent for deposits in the range of 12-24 months. Senior citizens are entitled to an interest rate of a very high 9.75 per cent. This is probably the best that it can get in terms of interest rates. A 24 months to less than 36 months deposit fetches an interest rate of 8.75 per cent. Suryoday Small Finance Bank is a small finance bank. These have been granted license recently by the Reserve Bank of India to set up a small finance bank.
Utkarsh Small Finance Bank
Utkarsh Small Finance Bank is another small finance bank that easily beats deposit interest rates of commercial banks by a distance. This entity gives an interest rate of 8.5 per cent on its 456-days to less than 2-years deposit. Senior citizens are entitled to an interest rate of 9 per cent on the same tenure. If you cannot place money in such a high tenure and wasnt a lower tenure of 1-year to 455-days, the bank offers you an interest rate of 8.40 per cent and the interest rate is 8.90 per cent for senior citizens.
The interest rates on the Bajaj Finserv FDs at 7.85 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. The deposits are rated AAA by Crisil.
Shriram Transport FD
You can get a yield of as high as 9.72 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.
7 FDs That Offer The Best Interest Rates In India
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