Which bank has the highest interest rate for fixed deposit?
Question: Which bank has the highest interest rate for fixed deposit?
If you are looking for a safe and reliable way to invest your money, you might want to consider fixed deposits (FDs). FDs are a type of bank account where you deposit a lump sum amount for a fixed period of time and earn interest on it. FDs are popular because they offer guaranteed returns, low risk and tax benefits.
But not all FDs are the same. Different banks offer different interest rates for different tenures. So how do you choose the best FD for your needs? Here are some tips to help you find out which bank has the highest interest rate for fixed deposit.
- Compare FD rates across banks: The easiest way to find out which bank offers the highest FD rate is to compare the rates offered by various banks for the same tenure. You can use online tools like Paisabazaar.com to compare FD rates across banks in India. You can also check the latest FD rates on the websites of the banks or visit their branches.
- Choose the right tenure: The interest rate on FDs depends on the tenure or duration of the deposit. Generally, longer tenures have higher interest rates than shorter ones. However, this may not always be the case. Sometimes, banks may offer special rates for certain tenures to attract customers. For example, as of 9 January 2024, Bandhan Bank offers 8% interest rate for 600 days (1 year, 7 months, 20 days) FD, which is higher than its 5-year FD rate of 5.85%. Therefore, you should check the interest rates for different tenures and choose the one that suits your financial goals and liquidity needs.
- Consider tax implications: The interest earned on FDs is taxable as per your income tax slab. However, you can claim deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act if you invest in a tax-saving FD for a minimum of 5 years. Tax-saving FDs usually have higher interest rates than regular FDs, but they also have a lock-in period of 5 years, which means you cannot withdraw or break them before maturity. Therefore, you should consider your tax liability and liquidity before investing in a tax-saving FD.
- Look for additional benefits: Apart from interest rates, you should also look for other benefits that banks may offer on their FDs. For example, some banks may offer higher interest rates for senior citizens, women, or existing customers. Some banks may also offer loan or overdraft facility against FDs, which can help you meet your emergency cash needs without breaking your FD. Some banks may also allow you to choose the frequency of interest payout, such as monthly, quarterly, half-yearly or yearly, depending on your preference.
As per the latest data available on Paisabazaar.com, here are some of the banks that offer the highest FD interest rates in India as of 9 January 2024:
- Unity Small Finance Bank: This bank offers the highest FD rate of 9% p.a. for deposits above 3 years up to less than 5 years.
- Suryoday Small Finance Bank: This bank offers 8.65% p.a. for deposits of 1 year up to less than 2 years and 8.6% p.a. for deposits of 3 years up to less than 5 years.
- Fincare Small Finance Bank: This bank offers 8.61% p.a. for deposits of 1 year up to less than 2 years and 8% p.a. for deposits of 5 years.
- DCB Bank: This bank offers 8% p.a. for deposits of 36 months and 7.6% p.a. for deposits above 3 years up to less than 5 years.
- RBL Bank: This bank offers 8% p.a. for deposits of 24 months up to less than 36 months and 7.5% p.a. for deposits above 3 years up to less than 5 years.
You can check the complete list of FD interest rates offered by various banks on Paisabazaar.com.
FDs are a good option to save and grow your money in a secure manner. However, you should do your research and compare the interest rates and other features of different banks before choosing an FD that suits your needs.
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