Bank fixed deposits (FDs) are best suited for investors with low risk appetite, say financial plannersMany individuals prefer investing their money in fixed deposits (FDs).
From a perspective of maximising the return on one's surplus money, this may not be an impressive move.
Investment in a bank FD or fixed deposit entails fixed, pre-determined returns over a certain lock-in period.
Although most banks today do offer FDs with the provision of early withdrawal, doing so with an equity-related investment - such as investment in mutual fund - opens the possibility of earning a higher return.
But with higher returns comes added risk, say financial planners.
Bank FDs are best suited for investors with low risk appetite, they add.
Most leading banks today, from public sector State Bank of India (SBI) to private sector peers HDFC Bank and ICICI Bank, offer an interest rate ranging from 6.6 per cent to 7.35 per cent on fixed deposits of a one-year term, according to an analysis of interest rates displayed on their websites.
( When to pick mutual fund over bank FD)State Bank of India (SBI)TenorsInterest rate (in per cent) for public w.e.f.
28.05.2018Interest rate for senior citizens w.e.f.
28.05.20187 days to 45 days5.756.2546 days to 179 days6.256.75180 days to 210 days6.356.85211 days to less than 1 year6.46.91 year to less than 2 year6.657.152 years to less than 3 years6.657.153 years to less than 5 years6.77.25 years and up to 10 years6.757.25(Source: sbi.co.in)ICICI BankRate of Interest (% p.a.) w.e.f June 07, 2018TenureGeneral publicSenior Citizen7 days to 14 days44.515 days to 29 days4.254.7530 days to 45 days5.5646 days to 60 days5.756.2561 days to 90 days66.591 days to 120 days66.5121 days to 184 days66.5185 days to 289 days6.256.75290 days to less than 1 year6.571 year to 389 days6.67.1390 days to 2 years6.757.252 years 1 day upto 5 years77.55 years 1 day upto 10 years77.55 Years Tax saver FD(Max upto Rs.
1.50 lac)77.5(Source: icicibank.com)(: Bank Fixed Deposits Vs Corporate Fixed Deposits: Interest Rates, Taxation, Risks)HDFC BankRate of Interest (% p.a.) w.e.f July 6, 2018TenureInterest rate for general publicInterest rate for senior citizen7 - 14 days3.50%4.00%15 - 29 days4.25%4.75%30 - 45 days5.75%6.25%46 - 60 days6.25%6.75%61 - 90 days6.25%6.75%91 days - 6 months6.25%6.75%6 months 1 day- 6 months 3 days6.35%6.85%6 months 4 days6.35%6.85%6 months 5 days- 9 months6.40%6.90%9 months 1 day- 9 months 3 days6.40%6.90%9 months 4 days6.40%6.90%9 months 5 days - 9 months 15 days6.40%6.90%9 months 16 days6.40%6.90%9 months 17 days < 1 Year6.40%6.90%1 Year6.85%7.35%1 year 1 day - 1 year 3 days6.65%7.15%1 year 4 days6.65%7.15%1 year 5 days - 1 Year 15 Days6.65%7.15%1 Year 16 days6.65%7.15%1 year 17 days - 2 Years7.00%7.50%2 years 1day - 2 Years15 days7.00%7.50%2 Years16 days7.00%7.50%2 years17 days - 3 Years7.00%7.50%3 years 1day - 5 years7.00%7.50%5 Years 1 Day - 8 Years6.00%6.50%8 Years 1 Day - 10 Years6.00%6.50%(Source: hdfcbank.com)Axis BankPeriodInterest rates (% per annum) with effect from 10/07/2018general publicsenior citizen7 days to 14 days3.53.515 days to 29 days3.53.530 days to 45 days5.55.546 days to 60 days6661 days < 3 months663 months < 4 months664 months < 5 months665 months < 6 months666 months < 7 months6.256.57 months < 8 months6.256.58 months < 9 months6.256.59 months < 10 months6.56.7510 months < 11 months6.56.7511 months < 1 year6.56.751 year < 13 months7.17.7513 months < 14 months7.17.7514 months < 15 months77.6515 months < 16 months77.6516 months < 17 months77.6517 months < 18 months77.6518 Months < 2 years77.652 years < 30 months77.6530 months < 3 years77.53 years < 5 years77.55 years to 10 years77.5(Source: axisbank.com)(: Recurring Deposit (RD) Interest Rates Of These Banks Are As High As 9%)