Top 10 private banks offering highest interest rates on FDs – Check details

By: |
October 9, 2020 11:56 AM

While most of the public and private sector banks are currently offering FD interest rates in the range of 4.25-5.5% p.a., there are a few private sector banks that are offering higher rates on fixed deposits.

Here are the highest interest rates currently being offered by some of the private banks in the country.

Assured returns, high liquidity and ease of investment make fixed deposits one of the most popular investment instruments in our country, particularly among risk-averse investors like senior citizens. However, the Reserve Bank of India’s decisions to cut the repo rate by 225 basis points since the beginning of 2019 has resulted in lowering of bank deposit interest rates, something that has been a cause of concern for countless investors who rely heavily on their FDs.

However, while most of the public and private sector banks are currently offering FD interest rates in the range of 4.25-5.5% p.a., there are a few private sector banks that are offering higher rates up to 7.15% p.a., as seen in the table below. This isn’t too low in comparison to the small finance banks which usually offer the highest FD rates (Jana Small Finance Bank is offering 7.5% p.a. on 2-3 years’ FDs while Equitas Small Finance Bank is offering 7.35% p.a. for the same tenures), according to BankBazaar.

As such, investors could consider parking their funds in FDs of any of these private or small finance banks after risk assessment to earn higher returns on their deposits. They could also implement what is called the laddering technique to maximise FD returns. Under this strategy, investors could break their funds and invest in different FDs with multiple tenures instead of investing it all in a single FD and keep reinvesting them upon maturity, if feasible, to create an investment loop.

This technique would help them benefit from any higher interest rate offerings in the future while keeping their investments even more liquid as it would reduce the possibility of having to pre-close an FD before maturity to meet any unexpected requirement after losing interest income.

Here are the highest interest rates currently being offered by some of the private banks in the country. Do note this list doesn’t include any public, foreign or small finance bank and the rates mentioned below are the highest advertised ones for normal FDs below Rs 1 crore, as per BankBazaar.

Also note the actual FD interest rate would be determined based on parameters like the investor’s age, gender, deposit amount and investment tenure.

Top 10 Private Banks Currently Offering The Highest Interest Rates On FDs

Disclaimer: Data as on respective banks’ websites on Oct 6, 2020; For each year range, the maximum offered interest rate is considered; interest rate is for a normal fixed deposit amount below Rs 1 crore. Compiled by BankBazaar.com

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