Interest rates on fixed deposits (FDs) have fallen a great deal in the last 1-year. As growth slows considerably, the RBI may be promoted to cut interest rates even further. Here are a few banks that offer high interest rates on their FDs.
IDFC First Bank
IDFC First Bank offers an interest rate of 8 per cent on a 1-year deposit. Even the 1 year 1 day deposit to 2 years deposit offers an interest rate of 8 per cent. No other commercial bank in the country offers such high deposit rates. '
Senior citizens are entitled to an interest rate of 8.50 per cent for the above mentioned tenures. It maybe noted that deposit interest rates attract a TDS if the amount exceeds Rs 10,000. Therefore, it is important that you submit form 15G or 15H as the case maybe, in case your income is not above the taxable limit.
This is a small finance bank that offers a pretty decent interest rate. A 2-3 year deposit at the bank fetches an interest rate of 8.75 per cent, which is not bad at all.
A one year 6 months to 2 year deposit on the other hand fetches an interest rate of 8.50 per cent. Against the backdrop of low interest rates, this deposit is very good. Since interest rates in the economy are falling, investors can look at a slightly longer duration for investing. Small finance banks are also regulated by the RBI and hence can be considered as relatively safe for investment.
Fincare Small Finance Bank
This bank offers an interest rate of 9 per cent on deposits 24 months 1 day to 36 months. Senior citizens are entitled to an extra 0.50 per cent interest rate, which takes their interest rates to 9.50 per cent for the same tenure.
A 21 months 1 day deposit to 24 months deposit fetches an interest rate of 8.75 per cent. We suggest that investors lock money in deposits for a longer period of time, given that interest rates in the economy have been falling. It is likely that we may see a further fall in interest rates as the RBI cuts interest rates on low inflation and slower economic growth.
Jana Small Finance Bank
Jana Small Finance Bank too offers very competitive rate of interest. A 1 year deposit fetches an interest rate of 8.50 per cent, whereas a 1 year to 2 year deposit fetches an interest rate of 8.60 per cent. The yield on these deposits 8.77 per cent and 9.28 per cent respectively, thanks to the compounding on the same. As indicated earlier investors can look at a long term perspective, given that interest rates in the economy are set to fall.
Ujjivan Small Finance Bank offers an interest rate of 8.15 per cent on a 735 deposits. This is not the best in terms of interest rates when compared to other small finance banks mentioned above.
However, it remains a very strong small finance bank. A 1 to 2 year deposit fetches an interest rate of 8.10 per cent.