Private banks are offering hefty interest rates of up to 9% on FDs. Banks are giving good interest this year as compared to last year.
In the midst of rising inflation in the country, the good days of FD have started. Common customers are also currently preferring to invest in most FD schemes because some big banks of the country are offering hefty interest rates of up to 9 percent on FDs. Banks are giving good interest this year as compared to last year. Amidst these rising interest rates, FD schemes have become even more attractive for the common people. Just a year ago, State Bank of India (SBI) was offering the highest interest rate of only 5.5 per cent on FDs, now it is offering an interest rate of up to 7.10 per cent.
Many private sector banks including HDFC Bank and ICICI Bank are offering interest rates of up to 7.1 per cent on FDs. You can get up to 7.2 percent interest on FD in Kotak Mahindra Bank and senior citizens can also earn an additional interest rate of 0.50 percent on FD. Yes Bank is giving 8 percent interest to senior citizens. Meanwhile, interest rates on fixed deposits in small finance banks have reached an attractive 9 per cent.
Do not put all the money in one big FD
According to experts, it may be a better idea to avoid investing all your money in a single FD, even if it is giving you the highest returns in the market. Let us now understand how to choose a tenor for your Fixed Deposit to get the highest returns. You need to choose your FD tenure based on your investment and prevailing interest rates. At present, the highest interest rate on FD offered by most of the banks is between one year to three years. So choose the tenure based on your need.
Understand the method of investment like this
For example, if you want the maturity money after three years. In such a situation, many big banks of the country are offering higher interest rates on FDs of 1 year, 2 years, 3 years or 5 years, so you can book one year FD now and withdraw the money after one year. Are. However, do not opt ​​for auto-renewable as this will deprive you of the opportunity to invest and compare the interest rates offered by banks at the time of maturity. There can be a possibility that by changing the tenure again, you can get better returns.
How to build an FD ladder for better returns
In large private banks, the difference between the highest FD rates of banks and their five year FD rate is less. The higher FD slab rates offered by PSU banks are around 50-100 basis points higher than the rates offered by them on FDs with a tenure of five years. In the case of small finance banks and most private sector banks, the difference between their higher FD slab rates and their five-year FD rates is mostly between 50 and 150 basis points. However, major private sector banks like Axis Bank, ICICI Bank and HDFC are exceptions as the difference in rates in their case is just 10-20 basis points.
For laddering, you may have to invest for different tenures. This means that for a medium term of two to three years, you can get better returns in PSU banks, while for long term FDs of five years or more, large private banks can be a better option, especially if you are a small investor. want to avoid banks
