Bank deposits are of significance for every individual. These are the ransom that we place in a banking institution. As these help to keep the money safe. Also, it retains the money flow steady and at a specific interest rate. They act as the heart of the economy, specifically the banking system. The deposits make sure that you have a sustainable investment. Also, these investments help to have a money supply for a lifetime. It is a primary tool for everyone to have monetary accessibility. These deposits are beneficial on the ground level. However, one should study the market well to make the right investment. For people unaware of the tricky market, a Fixed Deposit is the safest option. But the rates of interest vary. So, we need to be aware of the returns and rates that different banks provide.
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Types of Bank Deposits:
The banking institutions provide their customer base with several options to invest in. The following are the types of deposits that are primarily available across all the banking institutions in India:
Fixed Deposit (FD):
This is the most commonly opted type of deposit. Herein, you have to deposit a fixed amount to the bank. Also, the amount will remain fixed for a given tenure. It is guaranteed that you will get returns from such deposits. The range of interest in such deposits varies from 5% to 9%. The rate of interest is different for different banking institutions. Furthermore, the tenure of such deposits may vary from 7 days and may go up to 10 years. In addition to the interest, you can get an exemption from tax of up to a denomination of Rs. 1 lakh 50 thousand.
Current Account Deposit:
This kind of deposit comes with lesser restrictions than that of a deposit in a savings account. Also, it is popularly called a demand deposit account. If you are a business person, this account will help you to transact with lesser hustle. Multiple transactions happen smoothly with such deposit accounts. However, it is disadvantageous as the bank provides zero interest to such an account.
Savings Account Deposit:
This is a kind of account where one who has a fixed income can save their money. You need to deposit a certain amount to the bank to open such an account. The deposition amount varies from bank to bank. One can withdraw money using either an ATM card, get a cheque issued, or withdraw from the bank physically. The customers earn the interest as per the particular bank’s rate of interest.
A recurring deposit is a kind of deposit wherein you do not have to put in a lump sum ransom. Instead of a lump sum, a fixed amount should be put in every month. The rate of interest varies from 5% to 7% depending on the bank you are opting for.
Why choose Fixed Deposit over the others?
Mentioned below are some of the profits of having a Fixed Deposit:
- It assures allotted returns.
- Besides, it is free of risks.
- The rate of interest in the case of FDs is more than that of other investment instruments.
- An investor can apply for a loan against an FD.
- Also, it saves the investors from the unpredictability of the market.
Comparative Account of Interest Rates on Fixed Deposit in Different Banks:
The following table contains the Fixed Deposit interest rate of some leading banking institutions:
(For an FD of below Rs 2 crore)
|Bank||Interest rate per annum (For General Citizens)||Interest rate per annum (For Senior Citizens)|
|State Bank of India||2.90% to 5.50%||3.40% to 6.30%|
|Punjab National Bank||2.90% to 5.25%||3.50% to 5.75%|
|Punjab and Sind Bank||3.00% to 5.30%||3.50% to 5.80%|
|HDFC Bank||2.50% to 5.60%||3.00% to 6.35%|
|IDFC Bank||2.50% to 6.00%||3.00% to 6.50%|
State Bank of India:
State Bank of India is one such Nationalised bank that offers the highest rates of interest in FD. In the case of general citizens, it ranges from 2.9% to 5.5%. On the other hand, for Senior citizens, it ranges from 3.40% to 6.30%. The hike in interest rates happened recently. It is in application since the 15th of February, 2022. If the deposit is for more than 2 years then you will get an interest rate of 5.20%. This interest rate was previously 5.10%. On the contrary, if the tenure of the deposit is between 3 to 5 years then the interest rate will be 5.45%. For a deposit of 5 to 10 years the interest rate is 5.5%.
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Punjab National Bank:
Punjab National Bank is another Nationalised bank that has a large chain of customers opting for an FD. In the case of general citizens, it ranges from 2.9% to 5.25%. On the other hand, for Senior citizens, it ranges from 3.50% to 5.75%. The tenure of the FDs ranges from a minimum of 7days to a maximum of 10 years. In addition to these, there is an additional scheme known as the Uttam Scheme. This scheme provides an interest rate of 5.30% per annum.
Punjab Sind Bank:
Punjab Sind Bank is known to provide the highest rate of interest among all the other banks. In the case of general citizens, it ranges from 3.0% to 5.30%. On the other hand, for Senior citizens, it ranges from 3.50% to 5.80%. The tenure of the FDs ranges from a minimum of 7 days to a maximum of 10 years.
In recent times, the HDFC Bank from the private sector has had a rate of interest that has a hike of 10 basis points. In the case of general citizens, it ranges from 2.50% to 5.60%. On the other hand, for Senior citizens, it ranges from 3.00% to 6.35%. The tenure of the FDs ranges from a minimum of 7days to a maximum of 10 years. The hike in interest rates happened recently. It is in application since the 14th of February, 2022.
IDFC Bank is a privatized bank that provides the best rate of interest. In the case of general citizens, it ranges from 2.50% to 6.00%. 6.00% interest per annum is for the FDs that are for 5 years. On the other hand, for Senior citizens, it ranges from 3.00% to 6.50%.
From the above discussion, it is evident that IDFC Bank is presently providing the highest rate of interest on FDs. The bank is witnessing a rise in customers. This is happening predominantly because FD is one of the most sorted after schemes. On the other hand, among the nationalised banks the State Bank of India gives the best interest rates.