If you have just opened an FD account, you deserve a pat on the back. Before getting into the fine details like interest charges, here are few interesting things that you didn’t know about FD.
Most of the banks have cut their interest rates post-demonetisation. After November 8, banks saw a huge rush for depositing money which led to this move. You can choose a tenure period as short as 7 days or even up to 10 years. In case, the amount exceeds Rs.10000, a TDS or Tax Deduction at Source of 10 percent is deducted from your bank.
You end up paying penalty for any pre-mature withdrawal of money from FD account. In order to understand fixed deposit rates in India, you can divide them into 5 slots. They are as follows.
FD Interest Rates For Periods Less Than 1 year
If you have chosen your tenor for 365 days or 1 year, you will notice that few NBFCs/banks offer an interest rate anywhere between 7.0 percent to 8.05 percent. There are a handful of private sector banks that charge you anywhere between 4.40 percent to 7.0 percent.
Fixed Deposit Interest Rates in India For a Period of 1 to 2 Years
Most of the public sector and privately owned banks charge you 7.0 percent to 7.60 percent. Check with your lending bank to know what are their terms and interest rates.
Fixed Deposit Interest Rate Comparison
If you wish to open an Fixed Deposit account for a tenure ranging from 2 to 5 years, the charges levied vary from 7.10 percent to 7.50 percent. For a period from 5 to 10 years, you can expect the financial institution to levy charges of 7.0 percent to a marginal 7.70 percent.
Plant your money in the bank/NBFC for 10 years and above, and you will see that 7.70 percent is charged. Interest is calculated quarterly, and you can ask for loan or overdraft from the bank. The interest is 0.5 percent to 1.0 percent more than that of a regular FD account.
FD Interest Rate For Senior Citizens
Senior citizens (who are aged 60 years and above), are eligible for 0.25 percent additional rate of interest for deposits up to Rs 1 crore.If you make a bulk deposit of Rs.5 crore and above, the corresponding bank decides the rate of interest.
The Bottom Line
It is difficult to make a quick judgement when the stock markets are crazy. It is best to talk to a financial advisor who will inform you in detail about fixed deposit interest rates. Rely on your sense of intuition, plan ahead and reap the benefits with fixed deposit rates that the bank offers.