While FD interest rates have fallen across the board in the last few years, there are a few banks that offer decent interest rates. Take a look at some of these. Please do not invest for a very long term tenure, as we expect interest rates in the economy to rise gradually.
Deutsche Bank FDs
Deutsche Bank offers you an interest rate of 7.50 per cent on a 5-year deposit. This is the best that it gets from a good foreign bank. However, the only problem is that a 5-year deposit can be risky, if interest rates rise. Interest rates are already rising and SBI has hiked deposits over select tenures.
Remember, interest is subject to tax on these deposits.
RBL Bank FDs
FD at RBL Bank fetches you an interest rate of 7.20 per cent for a tenure of 24 months to less than 36 months. The effective annualized yield works to 7.34 per cent and 7.93 per cent for senior citizens. The interest is competitive and marginally higher than what government or leading private sector banks in the country offer.
It is important to remember that if you are in the highest tax bracket, the yields would be very meagre. If you are not likely to pay tax, it is better to submit for 15g and 15h.
Development Credit Bank FDs
Development Credit Bank offers an interest rate of 7.25 per cent for 24 to 60 months tenure. The effective annualized yield can be as high as 8.65 per cent over the 60 months period. However, as suggested earlier it would not be a good idea to invest for such a long duration.
On the 24 to 60 months deposit, senior citizens would receive an interest rate of 7.75 per cent. Go for these deposits for a shorter duration. Some banks charge a penalty for early withdrawal of the deposit.
Bandhan Bank FDs
If you do not wish to invest for a long duration, then the Banhan Bank deposits would be ideal. The bank is offering an interest rate of 7 per cent on a 1-year deposit. What is most interesting is that Senior citizens would be entitled to an interest rate of 0.75 per cent more on all the tenures at Bandhan Bank. This is extremely good considering that all banks in the country only offer 0.50 per cent extra interest for senior citizens.
Government controlled Repco Bank
The government controlled Repco Bank offers an interest rate of 7.35 per cent to women for 18 months. For tenures ranging for 1 and 2 years the interest rate is 7.25 per cent and 7.75 per cent for senior citizens.
Interestingly, for a very short term as well the bank offers a very good interest rate. For example, for a tenure of 90 days - 364 days, the bank also offers an interest rate of 7 per cent. This is extremely good for a short term deposit.