Bank FD's are best suited to park funds for capital preservation and for meeting some portion of one's regular income needs.
The fixed deposit interest rate of ICICI Bank has been revised downwards in line with the other leading commercial banks such as SBI, HDFC Bank and others. Going by the falling trend in the rates of interest, till date among the leading banks, only ICICI has revised the rates in July. In the case of ICICI Bank, the new FD rates are effective from July 14. The SBI FD interest rate was last revised on May 27 while the HDFC Bank fixed deposit (FD) interest rate was set on June 12.
Among the 3 banks- SBI, ICICI Bank and HDFC Bank the highest interest on the 1-year interest rate is offered by HDFC Bank. Over the long term, in the 5 years to 10 years’ tenure, the maximum rate of interest is being offered by ICICI Bank.
ICICI Bank FD interest rates
ICICI Bank FD rates (General)
1 year to 389 days: 5.15%
390 days to < 18 months : 5.15%
18 months days to 2 years: 5.35%
2 years 1 day to 3 years : 5.35%
3 years 1 day to 5 years : 5.50%
5 years 1 day to 10 years : 5.50%
ICICI Bank FD rates (Senior citizens)
1 year to 389 days: 5.65%
390 days to < 18 months : 5.65%
18 months days to 2 years: 5.85%
2 years 1 day to 3 years : 5.85%
3 years 1 day to 5 years : 6.00%
5 years 1 day to 10 years : 6.30%
To get the benefit of high rates, ICICI Bank also has a new FD called ICICI Bank Golden Years FD exclusively for senior citizens. In this FD one gets an exclusive additional interest rate of 0.30% on the Fixed Deposits above the 5- year tenure.
Resident Senior citizen customers will get an additional interest rate of 0.30% for a limited time over and above the existing additional rate of 0.50%. The applicable duration of this FD scheme is 20th May, 2020 to 30th September, 2020. The additional rate will be available on fresh deposits opened as well as deposits renewed during the scheme period. The eligible FD tenure has to be 5 years 1 day up to 10 years.
SBI FD interest rates
Effective May 27, 2020, the SBI FD rate of interest applicable for deposits of ‘1 year to less than 2 years’ and ‘2 years to less than 3 years’ offers 5.1 per cent return. Effectively, 1-2-3 year FD will provide 5.1 per cent return per annum on SBI FD schemes. And, the rate of interest applicable for deposits of ‘3 years to less than 5 years’ and ‘5 years and up to 10 years’ is 5.3 per cent per annum. For senior citizens, the additional interest rate of 0.5 per cent will apply on the amount deposited.
The only silver lining is for the senior citizens. A special “SBI Wecare” Deposit for Senior Citizens has been introduced by SBI wherein an additional premium of 30 bps over and above the existing 50 bps will be paid to Senior Citizen’s on their retail TD for ‘5 Years and above’ tenor only. ‘SBI Wecare” deposit scheme will be available for a limited period i.e. up to 30th September 2020.
HDFC Bank FD interest rates
HDFC Bank revised its interest rates on fixed deposits with effect from June 12, 2020.
HDFC Bank FD rates (General)
1 Year: 5.25%
1 year 1 day – 2 years: 5.25%
2 years 1 day – 3 years: 5.35%
3 year 1 day- 5 years: 5.50%
5 years 1 day – 10 years: 5.50%
HDFC Bank FD rates (Senior Citizens)
1 Year: 5.75%
1 year 1 day – 2 years: 5.75%
2 years 1 day – 3 years: 5.85%
3 year 1 day- 5 years: 6.00%
5 years 1 day – 10 years: 6.25%
An Additional Premium of 0.25% (over and above the existing premium of 0.50%) shall be given to Senior Citizens who wish to book the Fixed Deposit less than 5 crores for a tenure of 5 (five) years One Day to 10 Years, during special deposit offer commencing from 18th May’20 to 30th Sept’20.
As the interest rate is taxable and also after considering the inflation, the post-tax and post-inflation, effective return in bank FDs is very low. Bank FD’s are best suited to park funds for capital preservation and for meeting some portion of one’s regular income needs.