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Thursday 9 April 2020

5 banks that are offering the highest returns on FD

Within the constraint of a constantly reducing repo rate, there are some banks that are offering the highest interest rate on fixed deposits

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This year, the Reserve Bank of India (RBI) cut the repo rate by 1.35%, due to which loans became cheaper but the interest rate on investments decreased too. The repo rate cut has had an impact on fixed deposits as well. In December, many banks have cut interest rates on FDs by 10-50 basis points. Amid the economic slowdown, it is expected that the RBI will further reduce the repo rate in the coming days, which may further reduce the interest rate on FDs. Yet, within the constraint, there are some banks that are offering the highest interest rate on FDs.

Lakshmi Vilas Bank and IDFC First Bank are offering the maximum interest over a period of one year and two years.

banks offering the highest returns on FD 1

DCB is offering the highest interest rate on FDs of three years and five years.

Banks and their fixed deposits

An FD can be opened easily in the bank where you have a savings account. Some banks are offering the facility of opening FD without opening a savings account.

The minimum amount for opening an FD is different from bank-to-bank, but there is no limit on the maximum amount.

Generally, FD is for a minimum of 7 days and maximum for 10 years.

The interest rate available on FD is taxable. According to the current rule, if interest exceeds 10 thousand in a financial year, the bank deducts TDS. Form 15G and 15H have to be filled to avoid TDS.

The bank can charge a penalty if the FD breaks before maturing.

The bank can give loans on the basis of FD. The maximum loan amount is the fixed portion of the principal deposit that the bank determines.

On completion of the FD period, the bank renews it itself. If you do not want to do this, then the bank will have to inform it at the time of opening the account.

In the digital age, banks are now giving options to open FDs through net banking.

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