With interest rates having fallen very low, it's best to compare interest rates before investing. For Investors who are looking at a slightly longer term tenure of 5-year, German Bank - Deutsche Bank is offering a pretty decent interest rate.
How Deutsche Bank compares?
|Name of the bank||5-year deposit interest rate|
|State Bank of India||5.4%|
The interest rates being offered by Deutsche Bank on other tenures is more or less the same like other banks. However, it is only the 5-year tenure where there is a difference.
It's important to remember for investors when they go for long term tenure deposits is that they should not break these deposits. The one reason for that is there would be a charge of 1 per cent. This means you need to think before opening an FD for a period of 5 years.
Apart from this, we would not advise investors to open a deposit for a period of more than 1-2 years, as we believe that interest rates in the economy could rise. This means, that should interest rates rise, you would lose out, if you have booked a deposit for 5-years, given that if you break the deposit you would incur 1 per cent charges.
Other details of Deutsche Bank Fixed Deposits?
Investors can invest a minimum of Rs 20,000 in these deposits. In case of an emergency investors can avail an overdraft of up to 95 per cent of their fixed deposits. There is a nomination facility that is available and also one can book the fixed deposits online. For a tenure of 1-5 years, the interest rate is not too great and is pegged between 4.25 and 4.50 per cent. This is almost similar to what other banks in the country are offering. It's just that the 5-year deposit of Deutsche Bank has that better advantage.
For those looking at various other options to invest, company deposits are also not a bad bet. Here the interest rates are far better than banks. They could range from 6 to 7.5 per cent and some of these deposits are AAA rated. However, if investors are not comfortable with company Fds, they can stick to bank fds.
About the author
Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, commodities, debt, mutual funds and tax planning. Sunil is currently Managing Editor for Goodreturns.in