Fixed Deposits: Now you can get up to 7% interest on 3-year FDs; here’s how

New Delhi: In India, fixed deposits are one of the most popular ways to save money. It is a type of investment product offered by private and public sector banks, as well as non-banking financial institutions (NBFCs). Fixed deposits have long been associated with investments in the country, particularly among the middle and senior classes. The programme allows investors to park their assets safely while earning an annual fixed rate of interest. This provides stability to those who invest in fixed deposits, making them popular. In most circumstances, the interest rate on fixed deposit accounts is higher than that on savings accounts.

Fixed deposits are referred to as long-term deposits since they are held for an extended period of time, often seven to ten years. People continue to invest in this product because fixed deposits provide assured returns on investments. The bank pays the interest rate that was in effect at the time the money was deposited, making it completely risk-free, even if interest rates fell afterwards. They also come with additional benefits, such as a Rs 5 lakh guarantee if a bank goes into liquidation, and the returns are simply computed.

Fixed deposit rates have fallen in the two years since India was rocked by the Covid-19 epidemic. Due to the economic restrictions caused by Covid-19, the Reserve Bank of India cut repo rates by 1% in May 2020. Rates on fixed deposits have also been reduced as a result of this. FD investors had been expecting for the repo rates to be raised again since last year, but the RBI has decided to keep them the same.

Nonetheless, fixed deposits remain popular among those seeking risk-free investments. This means that the majority of deposits are made into FD accounts by middle-class and older folks. Fixed deposits are extremely popular among senior persons because their interest rates are often greater. Even if general interest rates are lower, five private sectors are offering up to 7% interest on fixed deposit accounts for senior persons, according to data. Let’s take a look at them

YES Bank

Yes Bank is offering a 7% interest rate to senior adults who register accounts with the bank for a minimum of three years. This is the lowest interest rate offered by a private bank. So, if one spends Rs 1 lakh, it will increase to Rs 1.23 lakh in three years.

RBL Bank

RBL Bank, originally Ratnakar Bank, offers a 6.80 percent interest rate on three-year fixed deposit accounts. A senior citizen will receive Rs 22,000 in interest on a Rs 1 lakh investment.

IndusInd Bank

IndusInd Bank, one of the sector's newest competitors, is giving 6.50 percent interest rates for older citizens who open three-year fixed deposit accounts. On a Rs 1 lakh deposit, investors will receive Rs 21,000 in interest. However, the minimum investment in this scenario must be Rs 10,000.

DCB Bank

Senior people who open accounts with DCB Bank receive a three-year interest rate of 6.45 percent. After three years, a fund of Rs 1 lakh will yield Rs 21,000 in interest.

IDFC Bank

For older persons who create accounts with IDFC Bank for three years, the fixed deposit rate is fixed at 6.25 percent. Within three years, a Rs 1 lakh deposit will grow to Rs 1.20 lakh.