Fixed Deposits (FD) are one among the best investment options in India when compared to other types of financial investment schemes. Through investments in equity and mutual funds may seem highly lucrative, let’s not forget that it comes with a high element of risk. This is not the case when it comes to FDs because they are also highly rewarding and come with almost nil risk.
Of course, the FD rates offered by most banks are not very attractive but let’s not forget that there are many Non-Banking Financial Companies (NBFCs) that offer a very high rate of interest.
Apart from this, there are many banks that offer tax saver FDs. This is an ideal way to park funds, save tax and earn an interest on the same. This is a wise option because an investor can claim up to Rs.1.5 lakh as a tax deduction under Section 80C of the Income Tax Act. All banks offer tax saver FDs and they usually offer a good rate of return and come with a 5-year tenure period. Some of the banks offering these term deposit schemes include ICICI, HDFC, State Bank of India (SBI), etc. At present, the SBI FD interest rates on tax saver FDs is 6.25%. SBI FD rates for senior citizens are much higher at 6.75%. On the other hand, ICICI offers 6.5% for all individuals and 7% for all senior citizens. HDFC offers a rate of return at 6%.
There are many new and small banks that are paying a much higher rate of interest when compared to traditional banks. For example, Suryoday Small Finance Bank is paying interest at the rate of 9%. ESAF bank offers 9%, while Mahaveer Bank offers 8%.
Bandhan Bank is offering an interest rate in the range of 8.25% to 8.75% per annum on FDs held for a period of 1 to 2 years. While Utkarsh Small Finance Bank offers interest at the rate of 8.25 to 8.75%.
There are many NBFCs that are offering a much higher rate of interest and for senior citizens, the interest rate is only much higher. Also, NBFCs usually do receive a credit rating and they are also not dependent on market developments and hence it is a rather safe and profitable type of investment., provided the ratings are good. There are many reasons to go for company FDs. Here are a few:
There are numerous benefits of investing in an FD. However, it is always wise to do your research and take into consideration all factors such as interest rate, tenure, the rate of return, interest pay-out options and credibility of the institution where you are putting your money. Be wary and make sure you take into consideration all your expectations before making a plunge. If your expectation is to earn maximum returns from an FD, then it is wise to go for the highest interest rate offered in the market. However, this does not mean that you blindly go for the interest rate, it is also important to check the reliability of the investment.
HEY ! I’m Nil (Founder of OnlineDrifts.com), Digital Marketer, Affiliate Marketer and a blogger writing about blogging tips, SEO, Tech Tips etc.
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