Hyderabad : Those, who expect high returns, should be ready to bear the risk of loss. If you want to choose schemes that provide guaranteed returns, fixed deposits (FDs) are the first choice. The RBI has been hiking the interest rate to curb inflation. The banks are trying to collect money from the depositors by paying good interest. In this order, the interest rates of FDs have been increasing for some time now.
More than 9 per cent interest is being received for fixed periods nowadays. In this context let us see what steps to follow while choosing these deposits. A year ago, the State Bank of India offered a maximum interest rate of 5.5 per cent. Now it is hiked to 7.10 per cent. HDFC Bank and ICICI Bank are also offering interest up to 7.1 per cent and Kotak Mahindra Bank 7.2 per cent. Senior citizens get 0.50 per cent higher interest. The Yes Bank has announced that it is giving interest up to 8.51 per cent to senior citizens.
The new generation of small finance banks (SFBs) is aggressively raising interest rates to compete with the big banks. Suryodaya Small Finance Bank is offering an interest rate of 9.05 per cent (annualized yield) for a period of 999 days to senior citizens. Ujjeevan SFB offers 8.20 per cent on 559 days deposit and 8.45 per cent on 560 days deposit. Unity Small Finance Bank is offering 9.5 per cent interest to senior citizens for a period of 1001 days.
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Equitas SFB is paying interest at 8.50 per cent for 888 days. Apart from this, other small finance banks are also giving more than 8 per cent interest for different periods. Fincare SFB is offering 8.71 per cent interest to senior citizens for a term of 750 days. Interest rates on fixed deposits depend on the tenure chosen. At present banks are not giving high interest on all term deposits. So, some caution should be exercised in choosing the duration.
Most of the banks offer maximum interest on deposits of one year, two years and three years. So, the duration of the deposit should be decided according to the requirement. If a bank is paying maximum interest for a period of one year, you can go for it. Do not select the 'auto renewal' facility. You can review the interest rates after a year and continue with the same bank or it can be changed.
If you want to make a large amount of fixed deposit, you can try one year deposit in one bank that gives maximum interest, two years in another bank and three years in another bank. Some banks offer special deposits in which senior citizens are getting 7.6 per cent interest on the 400-day special deposit offered by SBI Amrit Kalash. IDBI Bank is offering Amrit Mahotsav FD for a tenure of 444 days to senior citizens at 7.65 per cent interest. The Bank of India is offering 7.80 per cent interest for super senior citizens and 7.65 per cent interest for senior citizens for a period of 501 days in a special scheme called 'Shubh Arambh Deposit'.
