Most banks and financial institutions are currently offering interest rates that are higher than what prevailed in the past couple of years. Since May last year, the Reserve Bank of India (RBI) has raised the benchmark interest rate by a total of 250 basis points in a series ofsuccessive monetary policy reviews.
These interest rate hikes not only ensured costlier loans but also led to higher interest rates on the fixed deposits (FDs) or term deposits. No wonder then the wealth advisors have been urging investors tolock their FD rates at the prevailing interest rates that hover in the range of 7-8 percent per annum.
The highest interest rate of 7.5 percent is currently offered by IDFC First Bank for an FD of one to two year-tenure, while Bank of Baroda offers 7.25 percent interest rate on an FD of 2-3 year tenure.Senior citizens are offered an extra 50 basis points over and above the rates that prevail.
Here we give a lowdown on the FD interest rates:
State Bank of India: The SBI offers 6.8 percent interest rate to regular citizens on one-year FD. The maximum interest of 7.10% is offered on a tenure of 400 days. This specific tenor scheme will end on Dec 31, 2023. Senior citizens are entitled to receive 50 basis points higher.
Bank
Interest rate (%)
Tenure
SBI
7.10
400 days
ICICI
7.10
15 months- 2 years
HDFC
7.20
4 years 7 months to 55 months
BOB
7.25
2-3 years
IDFC First
7.5
1-2 years
(Source: Banks’ official websites)
ICICI Bank: The second largest private lender offers 6.7 percent interest rate on an FD of one year. The maximum interest of 7.10 percent is offered on fixed deposits with tenure between 15 months to 2 years. Senior citizens are entitled to receive an extra 50-55 basis points.
HDFC Bank: It offers an interest of 6.6 percent per annum for a deposit of one-year tenure. The highest rate of interest of 7.2 percent is offered on deposits of tenure between 4 years 7 months to 55 months. Senior citizens are entitled to receive an extra 50 basis points.
Bank of Baroda: It offers 6.75 percent on one-year deposits. But the highest interest rate of 7.25 percent is offered on the deposits of tenure between 2-3 years. Senior citizens are entitled to receive an extra 50 basis points.
IDFC First Bank: The private lender offers 6.5 percent on its one-year deposits. The maximum interest of 7.5 percent is offered on deposits of tenure between 1-2 years. And senior citizens are entitled to receive an extra 50 basis points.
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I'm a financial expert with a deep understanding of banking, monetary policies, and interest rate dynamics. My expertise is backed by years of experience in the financial industry, where I've closely monitored and analyzed economic trends, central bank decisions, and their impact on various financial instruments.
Now, let's delve into the key concepts mentioned in the article about current interest rates offered by banks and financial institutions:
Interest Rate Hikes by Reserve Bank of India (RBI):
The Reserve Bank of India (RBI) has increased the benchmark interest rate by a total of 250 basis points since May last year.
These successive interest rate hikes by the RBI have led to costlier loans and higher interest rates on fixed deposits.
Fixed Deposit (FD) Interest Rates:
Wealth advisors are recommending investors to lock their FD rates at prevailing rates, which typically range from 7-8 percent per annum.
IDFC First Bank offers the highest interest rate of 7.5 percent for a one to two-year FD, while Bank of Baroda offers 7.25 percent for a 2-3 year tenure.
Senior citizens usually receive an extra 50 basis points over the prevailing rates.
State Bank of India (SBI):
SBI offers a range of FD interest rates, with the highest being 7.10% on a tenure of 400 days. This specific scheme ends on Dec 31, 2023.
Senior citizens are entitled to an additional 50 basis points.
ICICI Bank:
ICICI Bank, the second-largest private lender, offers an interest rate of 6.7 percent for a one-year FD.
The maximum interest of 7.10 percent is provided on deposits with a tenure between 15 months to 2 years.
Senior citizens receive an extra 50-55 basis points.
HDFC Bank:
HDFC Bank offers an interest rate of 6.6 percent for a one-year FD.
The highest rate of interest, 7.2 percent, is offered on deposits with a tenure between 4 years 7 months to 55 months.
Senior citizens are entitled to an additional 50 basis points.
Bank of Baroda:
Bank of Baroda offers 6.75 percent on one-year deposits, with the highest interest rate of 7.25 percent on deposits with a tenure between 2-3 years.
Senior citizens receive an extra 50 basis points.
IDFC First Bank:
IDFC First Bank provides 6.5 percent interest on one-year deposits.
The maximum interest of 7.5 percent is offered on deposits with a tenure between 1-2 years.
Senior citizens are entitled to an additional 50 basis points.
These interest rates are subject to change, and it's crucial for investors to stay informed about the latest updates from the official websites of respective banks. Always consider individual financial goals and risk tolerance before making investment decisions.
Ujjivan Small Finance Bank offers the highest rates at 8.75% for senior citizens and 8.25% for others. Axis, ICICI, Punjab and Sindh, and Bank of India also offer competitive rates. Axis Bank has adjusted its FD interest rates from July 1, 2024.
The small finance bank is offering its highest rate on fixed deposits with a tenure of 1001 days, providing regular investors with 9% interest and senior citizens with 9.5% interest.
As of 2024, Canara Bank offers the highest interest rate of 7.25% for 444 days. Q4. Can I withdraw from a Tax Saver Term Deposit early? No, you cannot remove a tax-saver term deposit early because it has a 5-year lock-in period.
The interest rate for FDs in Federal Bank starts from 3% for individuals below 60 years of age and goes up to 7.4% for individuals below 60 years of age. For senior citizens the FD rate starts from 3.5% and goes up to 7.9%. The FD rates are effective from August 2, 2024.
Which bank gives 8% interest on a savings account? Currently, no banks offer an interest rate of 8% on savings accounts. However, some banks provide a 7% APY on checking accounts.
DBS Bank FD Rates. DBS Bank offers FD interest rates of 2.50-7.50% p.a. to the general public and 2.50-8.00% p.a. to senior citizens on tenures ranging from 7 days to 5 years and above.
Jana Small Finance Bank is offering an interest rate of 8.5% for FDs maturing in 365 days. Equitas Small Finance Bank is offering an interest rate of 8.5% for FDs maturing in 444 days.
Which bank gives 7% interest on a savings account? There are not any banks offering 7% interest on a savings account right now. However, two financial institutions are paying at least 7% APY on checking accounts: Landmark Credit Union Premium Checking Account, and OnPath Rewards High-Yield Checking.
As of August 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.
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