In SBI you get 6.45% interest whereas here you get 8.25% interest. Know which bank’s FD including PNB, HDFC will earn huge profits

If you want to get fixed and guaranteed returns by investing your hard-earned money in a safe place without any risk, then the present time is proving to be very favorable for making fixed deposit i.e. FD. While the country’s largest government bank, State Bank of India, is offering an average of 6.45 percent to 7.00 percent interest to its customers on regular tenures, there are some banks in the market where record-breaking annual interest of up to 8.25 percent is being given to ordinary citizens and senior citizens. Amid the monetary policy of the Reserve Bank of India and the stable stance of the repo rate, all public, private and small finance banks have restructured their deposit rates so that general account holders and pensioners can get maximum returns on their savings. From the capital Lucknow to small and big cities across the country, posters with special tenure of FD outside the bank branches are increasingly attracting the common people because even today, bank FD remains the most reliable source of security and fixed profits for traditional investors who are away from the ups and downs of the stock market.

Talking about leading public sector banks, State Bank of India is providing different interest rates to its customers for different periods. In SBI, where the common citizens get interest of around 6.80 percent for the tenure ranging from 1 year to less than 2 years, this rate falls in the range of 6.45 to 7.00 percent for the tenure ranging from 2 years to less than 3 years. Along with this, SBI’s special tenure schemes like ‘Amrit Kalash’ offer special returns of 7.10 percent for a tenure of 400 days and 7.60 percent for senior citizens. On the other hand, Punjab National Bank i.e. PNB has also made the rates very competitive for its account holders. In PNB, on deposits with tenure ranging from 400 days to 3 years, general customers are getting interest ranging from 6.50 percent to 7.25 percent, while Super Senior Citizens and Senior Citizens are being given an additional premium of 0.50 to 0.80 percent. Bank of Baroda, Canara Bank and Union Bank of India are also offering returns ranging from 6.70 to 7.30 percent on medium tenure FDs of 1 to 3 years, which has emerged as a strong option for account holders seeking safe government guarantee.

The largest private sector lenders HDFC Bank and ICICI Bank have also made strategic changes in their interest rates to raise deposits. HDFC Bank is offering annual interest ranging from 6.60 percent to 7.10 percent to general customers on specific tenures of 15 months to 18 months and 18 months to 21 months. For senior citizens, this rate increases to 7.60 percent in HDFC. ICICI Bank and Axis Bank are also providing interest at almost the same level at 7.10 to 7.20 percent for a tenure of 15 months to 2 years. The specialty of private banks is that they provide the facility to open FD in paperless manner in a few minutes through digital banking and mobile app, due to which the urban salaried class is able to park their immediate savings in FD immediately without going to the branch. Apart from this, even in tax saving FD i.e. schemes with lock-in period of 5 years, private banks are providing double benefit of return of up to 7.00 percent and tax exemption of up to Rs 1.5 lakh under Section 80C of Income Tax Act to the investors.

For investors who want to break away from the traditional 6.5 to 7 per cent range and earn maximum returns on their capital, institutions like Unity Small Finance Bank, Suryoday Small Finance Bank, Utkarsh and Ujjivan Small Finance Bank remain the most attractive options. Unity Small Finance Bank is offering 7.75 percent annual interest to general citizens and 8.25 percent to senior citizens on a special tenure of 1001 days. Similarly, Suryoday Bank and Jana Small Finance Bank are also giving returns of 7.50 to 7.75 percent to the general public and 8.00 to 8.25 percent to the elderly on a tenure of 2 to 3 years. This question arises in the minds of many investors whether it is safe to invest money in small finance banks, then the clear answer lies in the rules of RBI. Under the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India, the principal and interest amount of every depositor up to Rs 5 lakh in every bank is fully insured. This simply means that if you make an FD up to Rs 5 lakh in a small finance bank, then your capital is as safe as in a big government bank.

While investing in fixed deposits, it is not enough to just look at the highest interest rate, adopting the ‘FD laddering’ technique is considered the most prudent step. Laddering means that instead of locking your entire savings in a single bank or FD of a single tenure, dividing it across different time frames, such as making multiple FDs of 1 year, 2 years and 3 years. Due to this, the investor keeps getting liquidity i.e. cash at regular intervals and there is also an opportunity to invest the money again at higher returns when interest rates increase. Also, by distributing your total savings in a balanced manner among large public sector banks, strong private banks and small finance banks within the limit of Rs 5 lakh, you get the best combination of security and high returns. Senior citizens should always get an FD in their name so that they can take full advantage of the additional interest premium of 0.50 to 0.75 percent. Before investing, it is very beneficial from the financial point of view to understand the pre-mature withdrawal penalty, TDS deduction rules and formalities of submitting Form 15G/15H of the concerned bank.