FD interest rates: These 7 banks offer highest interest on fixed deposits on these tenures
The tenure on which different financial institution offers the highest rate of interest varies from bank to bank.
Prior to investing in a fixed deposit, investors often compare interest offered by different banks. One might argue that most banks -- more or less – offer similar, if not same, interest on their term deposits.
However, one must understand that a difference of 50 basis points over a long period of time can increase the interest income considerably. Let us understand this with the help of an example. If your total fixed deposit amounts to ₹10 lakh, an additional 50 basis point extra income leads to an additional income of ₹5,000 in one year.
If the FD is for three years, the additional income spikes to ₹15,000. And if the amount of FD is increased to double, this extra income – on account of extra 50 basis points – spikes to ₹30,000.
Here, we list out the highest interest rates offered by different banks across time periods. Some banks offer highest interest on their 2-3 year deposits, while the other bank offers highest interest on a 15-18 month deposit.
| Bank | Regular (%) | Senior citizens (%) | Tenure |
|---|---|---|---|
| HDFC Bank | 7.4 | 7.9 | 4 years 7 months |
| ICICI Bank | 7.25 | 7.85 | 15-18 months |
| Kotak Mahindra | 7.4 | 7.9 | 390-391 days |
| Federal Bank | 7.5 | 8 | 444 days |
| State Bank | 7 | 7.5 | 2-3 years |
| Bank of Baroda | 7.15 | 7.65 | 2-3 years |
| Union Bank | 7.3 | 7.8 | 456 days |
As we can see in the table above, highest interest rates are offered by Federal Bank which gives 7.5 percent to regular citizens and 8 percent to senior citizens on 444 day-tenure.
HDFC Bank offers 7.4 percent interest to regular citizens and 7.9 percent to senior citizens on an FD of 4 years and 7 months.
ICIC Bank offers the highest interest of 7.85 percent to senior citizens on a tenure of 15-18 months.
Likewise, Kotak Mahindra Bank offers 7.4 percent to regular citizens and 7.9 percent to senior citizens on an FD of 390-391 days tenure.
State lenders
The interest offered by state lenders is slightly lower. State Bank of India (SBI) offers 7 percent to regular citizens and 7.5 percent to senior citizens on 2-3 year tenure FD.
Bank of Baroda offers 7.15 percent and Union Bank offers 7.3 percent to regular cittizens on an FD of 2-3 yrars and 456 days, respectively. Senior citizens are entitled to receive an extra 50 basis points.
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