Investing in fixed deposits (FDs) is a traditional and safe way of earning returns on idle money. While it is a low-risk investment with guaranteed returns, it is essential to stay informed about the latest FD rates to earn the maximum interest income.
Here is a comprehensive guide to understanding the latest FD rates.
Understanding FD Rates
FD rates refer to the interest rate offered on the principal amount invested in an FD. The rate of interest is determined by several factors such as the duration of the FD, the bank or financial institution providing the FD, and the size of the deposit.
FD rates are expressed as a percentage per annum (p.a.), which means the interest rate earned in a year on your investment. For example, if the FD rate is 6%, an investment of INR 10,000 for one year will earn interest of INR 600.
Latest FD rates are generally higher than savings account rates since FDs require a lock-in period. The higher the duration of the FD, the higher the rate of interest offered.
FD Rates Comparison Among Banks
Banks and financial institutions have different FD rates based on their interest-paying capacity and other factors. To find the best FD rates, it is important to compare them among different banks.
Currently, major banks in India offer FD rates between 2.5% to 6.5% for a duration of 1 to 10 years. However, there may be variations depending on the deposit amount, age of the depositor, and other factors.
Here is a comparison of FD rates offered by some leading banks in India :
Bank | Interest Rate (% p.a.)
State Bank of India (SBI) | 2.9 – 5.4
ICICI Bank | 2.5 – 6.5
HDFC Bank | 2.75 – 5.5
Axis Bank | 2.5 – 6.5
Kotak Mahindra Bank | 3 – 6.25
From the above table, it can be observed that Kotak Mahindra Bank offers the highest FD rate of 6.25% for 5 years and above. However, it is important to note that the FD rates may vary based on the deposit amount, type of account, tax-saving FD, senior citizen FD, etc.
FD Rates for Senior Citizens
Senior citizens (above 60 years of age) are offered higher FD rates as compared to regular FD rates. The additional interest rate is generally between 0.25% to 0.75% p.a. But some banks offer up to 1% p.a. extra for senior citizen FDs.
Here is a comparison of FD rates offered by some banks for senior citizens:
Bank | FD Interest Rate (% p.a.) | Senior Citizen FD Interest Rate (% p.a.)
State Bank of India (SBI) | 3.4 – 6.2 | 3.9 – 6.7
ICICI Bank | 3 – 6.5 | 3.5 – 7
HDFC Bank | 3.25 – 6 | 3.75 – 6.5
Axis Bank | 3 – 6.5 | 3.5 – 7
Kotak Mahindra Bank | 3.5 – 6.5 | 4 – 7.25
From the above table, it can be observed that Kotak Mahindra Bank offers the highest FD rate of 7.25% for senior citizens for 5 years and above. However, it is important to note that the FD rates may vary based on the deposit amount, type of account, tax-saving FD, etc.
Tax Implications on FDs
Interest earned on FDs is taxable as per the income tax laws of India. The rate of tax depends on the income slab of the investor. For example, if the investor falls under the 30% tax bracket, the interest earned on FDs will be taxed at 30% plus surcharge and cess.
FD rates may be higher, but the post-tax income may reduce the overall returns. To optimize the returns, investors can consider tax-saving FDs, which offer tax benefits under Section 80C of the Income Tax Act, of 1961.
Conclusion
FDs offer stable returns and are a low-risk investment option. It is important to stay informed about the latest FD rates to earn the maximum returns on your investment. Comparison of FD rates among different banks can help in choosing the best FD option. Senior citizens can earn additional interest on FDs. However, investors must keep in mind the tax implications on FDs to gauge the overall returns.
EPF balance check refers to the process of verifying the number of funds accumulated in an individual’s Employees’ Provident Fund (EPF) account, which is a retirement savings scheme managed by the government in many countries.
Disclaimer:
Investors must gauge all the pros and cons of trading in the Indian financial market before investing in FDs. Interactions with banks or financial institutions and investment decisions are the sole responsibility of the investor. The author and the website do not guarantee the accuracy and completeness of the information provided. The investors must carry out their research before making any investment decisions.
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