Fixed Deposit Interest Rates – All You Need To Know

Fixed Deposit Interest Rates – All You Need To Know

October 29, 2020 0 By Meet

When we talk about reliable and safe investment options, we must first consider fixed deposits. In India, due to the reliability of the yield rate and the fact that it is easy to open a fixed deposit in any bank or post office and provide better returns than a savings account, fixed deposits have always been the favourite of investors. In this article, let’s take a look at the fixed deposit interest rates of various banks in India.

What Is A Fixed Deposit?

To be precise, time deposit refers to an investment option provided by banks and post offices in India. In this case, you must lock up the principal within a specified period. Once your investment has expired; you will get Principal + Interest. You can also choose to allocate interest rates regularly in your account.

Why Choose Fixed Deposits?

Safe Investment Option

People hesitate when investing in savings plans. Because they are always afraid of losing money, but this is not the case for fixed deposits. This is the safest investment option in any country, including India. It brings guaranteed returns during the specified term. It is an ideal case for risk-averse individuals. Unlike the stock market or real estate, it will not collapse!

Higher Interest Rates

Compared with other savings plans, fixed deposits will provide you with a higher rate of return. You need to deposit for a longer time; this is why you will get a higher return in return! Open a fd today and avail high fixed deposit interest rates on fd.

Savior Of Bad Times

The problem always appears without warning. Although fixed deposits are not allowed to be paid before maturity, they can save your precious time. Instead of borrowing from a bank, it is better to borrow money from its FD. Yes, you can get a loan of up to 90% of the fixed deposit amount. Best of all, the interest rate of this type of loan is much lower than the bank’s personal loan!

Flexibility

Time deposits are flexible. No one can force you to sign a ten-year agreement. You can choose the desired term between 7 and 10 years. It doesn’t work like mutual funds or real estate. You can open an account as low as Rs. one thousand.

How Much Can You Earn With A Fixed Deposit?

As mentioned earlier, if you have savings, please make a fixed deposit because it will bring you value at a higher rate of return without losing a penny. Currently, the average interest rate is 9% per year. Well, interest rates vary from bank to bank. But once you deposit funds, it will be locked and will remain the same throughout the expiry period!                                           

Interest Will Be Compounded!

Compound interest is the secret recipe for time deposits. Most people don’t know that because of compound interest, they will get additional returns. Let me break it down for you. For example; you have fixed the amount of Rs. 1,000, the tax rate is 10%. After one year, you will have the principal of Rs. 1,000 rupees. 100 as interest. Next year, interest rates will be applied to both rupees. 1,000 + rupees. Ending at 100 rupees. 110 as interest.

Fixed Deposit Interest Rates For Private Banks

Different banks offer different interest rates. For convenience, the following is a list of top private banks and their fixed deposit rates of return.

Fixed Deposit Interest Rates For Public Banks

Please see all the lists of the best public banks and their fixed deposit rates.

Alternative To A Fixed Deposit

There is no doubt that time deposits are a profitable investment option. However, there is a situation that makes people reluctant to go to the bank FD. When interest rates fall, time deposits will suffer severely. Interest rate basically refers to the interest rate on bank loans. When interest rates decrease, investors will not invest in FD.

Do not worry! Problems are always accompanied by solutions! You can use debt mutual funds as an effective tax option with liquidity options. With a lower interest rate system, nothing can save you better than debt mutual funds. We can call it somewhere between fixed deposits and mobile deposits. In short, they bring good returns, liquidity and a certain degree of risk.

Versatility is the true charm of debt mutual funds. We welcome you with various opportunities for different terms.

When interest rates fall, you must choose debt funds instead of bank deposits. You can choose the following options:

  • Liquidity: As the name suggests, you can invest in this type of capital in a short period of time (for example, overnight). It has no export load, and you can redeem them easily!
  • Ultra-short-term funds: These funds are best for you when you can afford to invest for six months or one year!
  • Dynamic bond funds: These bond funds will replace FD when interest rates fall. In this case, the government mixes investment. Securities and company documents. When interest rates change with market changes, investors will enjoy additional benefits.
  • Income Fund: If you are considering a long-term investment with stable returns, then an income fund is what you want!

Wrapping Up!

Apart from the impact of falling interest rates, there is no reason to ignore time deposits. In the long run, these deposits have higher capital gains and tax incentives, and will not lose a dime!

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