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High Interest Rate Banks for Fixed Deposit in India

Running a saving account and opening a fixed deposit is one of the best ways to have a secured investment. It helps you put aside a lump sum of your money and watch it grow with the high-interest rates. A fixed deposit allows you to invest according to the timelines of your financial goals. It is a safe investment option to earn relatively higher interest than a regular savings account. A fixed deposit is excellent for investors who do not want to risk their investment. 

What are the different types of fixed deposits?

Standard Fixed Deposit

A standard fixed deposit is one of the most common investment schemes in the country. It involves investing an amount for a fixed period with a predetermined interest rate set by the bank. The fixed deposit duration can range from 7 days up to 10 years, depending on your preference.

Corporate Fixed Deposit

A corporate fixed deposit is a type of deposit held over a fixed period at a specified interest rate. These deposits offer higher interest rates when compared to banks by Financial and Non-Banking financial companies. The fixed deposits can range from a few months to a few years, depending on your choice.

Cumulative Fixed Deposit

 A cumulative fixed deposit requires you to invest your money over a duration. Owners are restricted from regular payouts in a cumulative fixed deposit. These allow the interest to accumulate until maturity. The interest earned from the initial deposit is paid together at the end of the tenure. This investment scheme is suitable for individuals with long-term investment goals.

Non-Cumulative Fixed Deposit

A non-cumulative fixed deposit occurs when the accumulated interest is paid to the investors on a regular basis. The interest can be paid monthly, quarterly, half-yearly, or yearly, depending on the investor’s choice. Non-cumulative fixed deposit is most suited for investors with monthly goals or bills to pay. 

Tax-Saving Fixed Deposit

A Tax-Saving Fixed Deposit is a plan that assists in tax savings and is accessible at practically all banks. This process has a lock-in period of 5 years, during which you cannot access or withdraw the funds. Tax saving a fixed deposit is suitable for senior citizens, as they enjoy higher interest rates on their tax-saving FD.

Senior Citizen Fixed Deposit

A senior citizen fixed deposit is a special interest rate offered by leading banks to individuals who are over the age of 60. The scheme gives a 0.50% increase in interest rates over the standard interest rates. It also provides an additional 0.10% p.a for women depositors.

Which bank has a high-interest rate on fixed deposits?

Kotak Mahindra Bank

Kotak Mahindra Bank raised fixed deposit interest rates for amounts less than Rs 2 crore at the beginning of August 17, 2022. It was raised to 15 basis points for fixed deposits of one to three years. The interest rate on FDs with maturities ranging from 365 to 389 days has also been increased from 5.60 % to 5.79%. Also, interest rates on fixed deposits with maturities ranging from 390 days to three years have been increased from 5.75% to 5.90 %

The State Bank of India 

The State Bank of India raised interest rates on fixed deposits by up to 15 basis points on August 13, 2022. These increments will apply to fixed deposits worth less than Rs 2 crore. The interest rate for tenures of one to two years has been raised from 5.30% to 5.45 %. 

Punjab National Bank 

Punjab National Bank increased fixed deposit interest rates up to 20 basis points for amounts less than Rs 2 crore on August 17, 2022. The bank now offers a 5.50 percent interest rate on deposits maturing in one year. These show a 20 basis point increase. 

Axis Bank

Axis Bank increased the interest rates on fixed deposits effective on August 11, 2022, for sums under Rs 2 crore. The bank has increased the interest rate of 17 to 18 months fixed deposit from 5.60%to 6.05%. 

HDFC Bank 

HDFC Bank has raised fixed deposit interest rates to 40 basis points from August 18, 2022. These rates apply to deposits of less than Rs 2 crore. According to the HDFC Bank website, one year to two years period will earn 5.50 % instead of 5.35 %. These indicate a 15 basis point increase. Also, the three-year to five-year period increased from 5.70 % to 6.10%. But, duration ranging from two to three years will continue to earn 5.50 %. 

The bottom line 

Having a savings bank account in the form of a fixed deposit is a great investment option. It is a safe investment scheme with a steady interest payout when you use a non-cumulative fixed deposit.

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