Investment ease and clarity, assured returns, several tenure choices and higher liquidity make fixed deposits (FDs) one of the most well-liked investment instruments in our nation, in particular amongst danger-averse investors like senior citizens who frequently rely on their FD returns even for their day-to-day costs.
However, with the Reserve Bank of India maintaining the repo price unchanged at a low of 4% for more than a year now, several banks have lowered their FD interest prices. This, coupled with the reality that FD returns are completely taxable according to the tax slab price of investors could additional reduce the genuine price of returns – a thing that has been a worrying trend for the investors.
That getting stated, there are nonetheless a couple of private and compact finance banks that are at present supplying above-typical FD interest prices. Investors could look at parking a portion of their funds with the FDs of these banks just after a thorough danger assessment, in particular if performing so is in line with their returns expectations and danger tolerance.
Investors could also deploy what is termed as the ‘FD laddering’ approach to maximise investment advantages. Under this approach, you can break your investment fund to invest in several FDs (ideally with a couple of banks) with distinctive tenures and create an investment loop rather of parking your complete funds in a single FD, according to BankBazaar.
For instance, if you want to invest Rs 5 lakh, then rather of investing it all in a single FD for 5 years, you can break the corpus into 5 FDs of Rs 1 lakh every single. The 1st FD could have a tenure of 1 year, the second for 2 years, the third for 3 years, the fourth for 4 years and the fifth for 5 years. You should really also reinvest your FDs, if feasible, upon maturity to make an investment loop. This would permit you to advantage from any larger returns offer you in the future although minimising the need to have to pre-close an FD just after losing interest revenue to meet any requirement.
So, if you are preparing to invest in an FD, here’s a list of 10 private banks that are at present supplying the highest interest prices on typical FDs amounting to significantly less than Rs 1 crore for tenures up to 5 years. Do note, senior citizen depositors typically get preferential prices by up to 50 basis points more than and above the typical prices.
10 Private Banks Offering the Highest FD Returns for Tenures up to 5 Years
Disclaimer: Data as on respective banks’ sites on July 23, 2021. All interest prices for non-senior-citizen fixed deposits amounting to significantly less than Rs 1 crore.
Data compiled by BankBazaar.com, an on-line marketplace for loans, credit cards and more.