5 Best Bank Fixed Deposits in 2018 for Investment with Highest Interest Rate

5 Best Bank Fixed Deposits in 2018 for Investment with Highest Interest Rate

Roboadviso     Top 5 Mutual Funds     Posted On, Tue 16th January, 2018     No comments
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Best fixed deposit with highest interest rate

The policy of demonetization which made INR notes of 1000 and 500 as illegal tender resulted in lots of deposits into the banks. This made the banks flush with money and consequently there was expectation that the deposit rates will be reduced by the banks. Fortunately, there has not been a significant decrease in the interest rates on deposits. It may be noted that a relatively high interest rate of 9 percent on fixed deposits is currently being offered by some banks.

Individuals who do not want to take risk and invest in funds subject to market risks but want to avail of higher interest rates and higher returns for their monies can opt for investments in bank fixed deposits. When you invest in bank fixed deposits, you can be assured of a fixed return for a specific tenure or time period. This shows that a bank fixed deposit is a financial instrument that allows investors to know the exact future worth of the money that they put in such deposits.

Another name for fixed deposits is ‘term deposits.’ Hence, people do not need to get puzzled when they come across these two terms. In most cases, bank fixed deposits offer a return or a rate of interest ranging between 7 and 8 percent. However, as mentioned earlier, there are some banks which have begun offering a return of 9 percent on FD (fixed deposit) investment with a tenure ranging between 12 months and less than 24 months.

Benefits of bank fixed deposits

Two of the most important benefits of fixed deposits are insurance and tax credit.

Fixed deposits do not just guarantee a better return on your investment, but it may also be noted that such fixed deposit investments comes with a tax benefit option. As per section 80C of the Income Tax Act, investors can get tax credit for INR 1.5 lakhs. You need to ensure that you put your money into an FD with tenure of 5 years to get tax benefits. It may be noted that the 5-year tenure refers to the lock-in period of the fixed deposit till it attains maturity.

Fixed deposits in banks are better and safer than saving instruments offered at post offices. This is due to the fact that bank FDs come with insurance coverage under DICGC, i.e., Deposit Insurance and Credit Guarantee Corporation. As per this coverage investments get insured for not more than INR 1 lakh. DICGC covers every bank in the country and thus helps protect the interest and investment of consumers.

The FD interest rates currently offered by different banks

Different kinds of interest rates and returns on fixed deposits are currently being offered by varied small finance banks, commercial banks, and other kinds of banks. These investments can assist people in accumulating wealth to meet their financial goals over the short term. People with long-term financial needs can opt for fixed deposits with tenure of 5 years or more and get a guaranteed good return over the specific time period of investment.

Listed below are the top five bank fixed deposits that offer the highest rates of interest.

It may be noted that these rates are applicable for citizens who are not senior, i.e., under the age of 60 years.

  • The interest rate offered by RBL Bank for FDs with a tenure ranging between 24 months and less than 36 months is 7.85 percent.
  • The interest rate offered by Bandhan Bank for FDs with 1-year (365 days) tenure is 7.70 percent.
  • The interest rate offered by IDFC Bank for FDs with tenure of 366 days is 7.50 percent.
  • The interest rate offered by DBS Bank for FDs with a tenure ranging between 2 years and less than 3 years is 7.50 percent.
  • The interest rate offered by DCB Bank for FDs with a tenure ranging between 36 months and 60 months is 7.25 percent.

Listed below are the top five commercial bank fixed deposits that offer the highest rates of interest for tenures of 1, 3, 5, and 10 years.

It may be noted that these rates are applicable for citizens who are not senior, i.e., under the age of 60 years.

  • The interest rate offered by Axis Bank for 1-year FDs is 7.00 percent; for 3-year FD is 6.75 percent; for 5-year FD is 6.75 percent; and for 10-year FD is 6.75 percent.
  • The interest rate offered by Bank of Baroda for 1-year FDs is 7.00 percent; for 3-year FD is 6.85 percent; for 5-year FD is 6.50 percent; and for 10-year FD is 6.50 percent.
  • The interest rate offered by ICICI Bank for 1-year FDs is 6.90 percent; for 3-year FD is 6.75 percent; for 5-year FD is 6.75 percent; and for 10-year FD is 6.50 percent.
  • The interest rate offered by State Bank Of India (SBI) for 1-year FDs is 6.90 percent; for 3-year FD is 6.50 percent; for 5-year FD is 6.50 percent; and for 10-year FD is 6.50 percent.
  • The interest rate offered by HDFC Bank for 1-year FDs is 6.90 percent; for 3-year FD is 6.00 percent; for 5-year FD is 6.00 percent; and for 10-year FD is 6.00 percent.

Listed below are the top four small finance bank fixed deposits that offer the highest rates of interest.

It may be noted that these rates are applicable for citizens who are not senior, i.e., under the age of 60 years.

  • The interest rate offered by Suryoday Small Finance Bank Ltd for FDs with a tenure ranging between 12 months and less than 24 months is 9.00 percent.
  • The interest rate offered by Ujjivan Small Finance Bank Ltd for FDs with a tenure ranging between 1 year and less than 2 years is 8.00 percent.
  • The interest rate offered by Equitas Small Finance Bank Ltd for FDs with a tenure ranging between 1 year and 3 years is 7.25 percent.
  • The interest rate offered by Capital Small Finance Bank Ltd for FDs with tenure of 400 days is 7.20 percent.

Precautions to be followed when making investments in bank fixed deposits

  • Before putting your money into a bank fixed deposit, investors need to ensure that they know all details of the FD, including its tenure as well as the different taxes which may be applicable during the period of FD investment.
  • It also needs to be noted that tax gets deducted from the interest rate on fixed deposits according to the tax bracket you fall under. This decreases the total returns on the investment; however such TDS is applicable when the interest earnings are over INR 10,000.
  • Another point to remember is that investors have to show the interest earnings each year when filing taxes so as to save tax.
  • If the total income is not more than the taxable limit, then in such instances senior citizens can submit Form 15H and non-senior citizens can submit Form 15G to avoid tax deducted at source (TDS).

 

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