Top three private sector banks offer better FD rates than largest three PSU banks, mostly

February 28, 2018 16:01 IST

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After India’s largest bank, SBI announced revision in interest rates on retail fixed deposits below Rs 1 crore from today, top three private sector lenders by asset size, i.e, HDFC Bank, ICICI Bank and Axis Bank still offer better returns largely. Notably, while SBI offers a 6.25% interest rate on a six-month and one-year period, HDFC Bank offers 6% and 6.75% in the same period. Interestingly, while according to the latest revision by SBI, the three-year and five-year fixed deposit rate at 6.5% is higher than HDFC Bank’s 6%. As investors may be interested to check the rates of private sector bank fixed deposit rates, and how they compare with their larger PSU counterparts, we take a closer look. All the rates are for fixed deposits below Rs 1 crore for retail deposits. Senior citizen fixed deposit rates have not been considered.

Private sector banks offer better 1 year FD rates

Notably, in the 1-year period, the top three private sector banks i.e., HDFC Bank, ICICI Bank as well as Axis Bank offer an interest rate of 6.75%. This rate is closely matched by the second largest PSU lender Punjab National Bank which offers an interest rate of 6.6%. In the 1-year period while SBI offers 6.25%, the third largest lender Bank of Baroda offers 6.45%. Notably, in the three year period, Axis Bank offers a higher interest rates than its private and public sector peers under consideration at 6.9%. All the top three PSU banks, i.e, SBI, PNB and Bank of Baroda offer 6.5% in the 3 year period. ICICI Bank too offers a one-year fixed rate of 6.5%, while HDFC Bank offers 6% rate.

Private Sector banks offer better rates in 5 year period

While HDFC Bank offers just 6% returns in the 5-year period for deposits up to Rs 1 crore, ICICI Bank and Axis Bank offer 6.5% and 6.9% respectively, better than their public sector counterparts PNB and bank of Baroda who offer 6.25% each. SBI offers 6.5% FD interest rate for a five year time period.

Public Sector bank deposits better for 6-month period

All the top three public sector lenders offer returns either matching their top three private counterparts or even better. SBI, PNB and Axis Bank offer 6.25% each, while HDFC Bank, ICICI Bank and Bank of Baroda offer 6% interest rate.

Higher FD interest rates of Yes Bank

Most notably, Yes Bank the fourth largest private sector lender offers the most attractive return than the top three public as well as private sector banks in the one-year, three-year and five-year period at 7%. In the six-month period, Yes Bank offers 6.7%. Kotak Mahindra Bank, the fifth largest private sector lender offers 6.6%, 6.8%, 6.5% and 6.25% in the six month, 1 year, 3-year and 5-year period.

This article was first uploaded on February twenty-eight, twenty eighteen, at one minutes past four in the afternoon.