5 Reasons why you Need to Know About Current FD Rates

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Indian economy is currently going through a recession causing FD rates to fluctuate. Lately, in its endeavour to support up the economy and thus increase the cash flow, Reserve Bank of India made a cut in the repo and reverse repo rate due to which current FD rates went down.

As your overall returns are solely dependent upon your FD interest rates it is very important for you to make a well-informed financial decision. In order to achieve all the goals you want, you need to know all about the current FD rates. Let’s have a look at all the different reasons that make knowing all about current fd rates quite important for you. 

why you Need to Know About Current FD Rates

Why do you need to know all about current FD rates?

1. Fluctuation in FD rates

Fluctuation is the primary reason to know about the current FD rates. The economy sometimes undergoes the recession period and RBI being the central bank has to endeavor to support it. For instance, RBI had to cut the repo and reverse repo rates latterly. Banks and other financial institutions, following the suit, decreased FD interest rates further causing a decrease in the overall maturity value.

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2. Varying Interests

Rate of Interest on Fixed Deposits varies from banks to banks and NBFCs to NBFCs. So it is very important for you to be aware of the current fd rates and invest accordingly. Interest being the major factor on which your overall returns of FDs depend, you must keep a full check on the best FD interest rates offered by these institutions.

Best FD interest rates 2020 offered by Banks in India

Name of the BankFD ratesW.e.f
Deutsche Bank4.65% – 7.25%April 18 2020
IDFC First Bank7% – 7.25%January 1 2020
RBL Bank 6.65% – 7.15%March 1 2020

 

Best FD interest rates 2020 offered by Small Finance Banks in India

Name of the BankFD RatesW.e.f
Fincare Small Finance Bank6.75% – 9.00%March 23 2020
Suryoday Small Finance Bank7.75% – 9.00% April 2 2020
Jana Small Finance Bank7.50% – 8.25%March 3 2020 

 

Best FD interest rates 2020 offered by NBFCs in India

Company FDFD Interest rates 2020Tenure of FD
Bajaj Finserv FD7.40% – 7.85%1 – 5 years
LIC Housing Finance FD7.50% – 7.60%1 – 5 years
HDFC FD7.30% – 7.50%12 to 84 months

3. Tax Factor

The Current FD rates on a tax saving FD need to be considered which ranges from 5.5% – 7.75%. In the case of a tax-saver FD, you can get tax deduction under section 80C of the Indian Income Tax Act,1961. The lock-in period for tax saver FDs is 5 years, so if you have a goal to be achieved in the same duration you can go for them.

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4. Difference between Cumulative & non-cumulative FD

Every Banks & NBFCs offer different interest rates on cumulative & non-cumulative FDs. To compare which bank or NBFCs has a good interest depend on this factor. An investor needs to know about current FD rates. 

In a cumulative fixed deposit, interest is paid at the time of maturity while in a non-cumulative FD, interest is paid out monthly, quarterly, half-yearly, or annually, as per the investor’s choice. Interest earned in a Cumulative FDs will be higher than non-cumulative ones because of the power of compounding.

5. Tenure Options

Every corporate & non-corporate financial institution offers different rates of interest, on the basis of tenure of an FD. Tenure of an FD varies from 7 days to 10 years. So in order to compare which bank or NBFC provides the best FD interest rates based on the factor of tenure, we need to know about the current fd rates.

Best FD Interest Rates 2020

These are some reputed banks & NBFCs in the table below that provide the best Fixed deposit interest rates in India based on the tenure of your FD. 

NameTenure of 1 yearTenure of 3 yearsTenure of 5 years
Bajaj Finance 7.40%7.50%7.60%
SBI5.25%6.00%6.25%
ICICI4.00%6.5%6.5%
Citi Bank3%5%5%
Axis Bank3.5%6.7%6.7%
HDFC Bank3.5%6%6%
Canara Bank4.20%6.20%6%
HDFC Bank3.5%6%6%
IDFC First Bank4%4.5%4.6%

Benefits of investing in Bajaj Finance FD

Apart from providing one of the highest rates of interest on FDs in India, here are other benefits of Bajaj Finance FDs:-

  1. Developing a habit of saving money is covered under the benefits of a fixed deposit.
  2. The second considerable benefit of a fixed deposit is an assurance of a return. With ICRA’s MAAA (stable) rating and CRISIL’s FAAA (stable) rating, Bajaj Finance is the most secure option to park your savings.
  3. Bajaj Finance FDs offer higher Fixed deposit rates for Senior Citizens. The interest rate for senior citizens is up to 7.85%.
  4. Loan against fixed deposit is the most lucrative feature of a Bajaj Finance FD. Up to 75% of the deposit amount can be availed as a loan on a very nominal rate of interest while you keep earning interest on the rest of the FD amount. 

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Lately, in its endeavor to support up the economy and thus increase the cash flow, Reserve Bank of India made a cut in the repo and reverse repo rate due to which current FD rates went down. As your overall returns are solely dependent upon your FD interest rates it is very important for you to make a well-informed financial decision. In order to achieve all the goals you want, you need to know all the factors affecting the current FD rates such as

  • Market fluctuations and RBI Norms
  • Varying interest rates and features of banks and company FDs
  • Presence of tax-saving FDs in the market
  • The difference in types of interest payout options i.e cumulative and non-cumulative FDs
  • And lastly, Interests rates to be dependent upon the tenure of your FDs

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About Author

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.

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