Fixed deposit (FD) accounts offered by banks and post offices is a financial instrument that provides the customer with a higher rate of interest than their savings and recurring deposits. The interest rates remain fixed until a particular maturity period. The rates don’t change and the subscribers know about the returns that he/she will make on his/ her FD investment at the time of applying. The banks and post offices are the best option to open a fixed deposit account. To open a fixed deposit account, a customer needs to have a savings bank account in a particular bank and branch. The rates of interest, however, vary from bank to bank. Nowadays an individual can open a fixed deposit account online.
Let us look at the rate of Interest offered by SBI, HDFC, ICICI, PNB, Axis Bank and Post Offices:
SBI: The country’s largest lender provides an interest of 5.75 percent to those who want to fix a certain amount of money from a period of ‘7 days to 45 days’. For a period of ’46 days to 179 days’, it provides 6.25 per cent while for ‘180 days to 210 days’, it provides an interest of 6.35 per cent. For a period of ‘211 days to less than 1 year’ and for a period of ‘1 year to less than 2 years’, it offers an interest of 6.40 per cent. The SBI provides an interest of 6.50 percent for a term of ‘2 years to less than 3 years’, ‘3 years to less than 5 years’ and ‘5 years and up to 10 years’.
HDFC: HDFC is India’s largest private sector bank by assets. To open a Fixed deposit with HDFC Bank, the rate of Interest on Term deposits are calculated in four ways-
(a) The quarterly basis for deposits >= Six months.
(b) Simple interest paid at maturity for deposits < 6 months.
(c) Cumulative Interest or Re-Investment Interest- Calculated every quarter.
(d) Monthly deposit scheme- Calculated every quarter
Given below is a chart showing the details of term deposits in HDFC bank:
ICICI: ICICI Bank, stands for Industrial Credit and Investment Corporation of India is one of the leading private sector bank in the country. The bank has total consolidated assets of Rs 11,242.81 billion at March 31, 2018. The bank has a network of around 4,867 branches and 14,367 ATMs across India. Minimum tenure for Domestic and NRO term deposits is 7 days while maximum tenure is 10 years.
Given below is a chart showing the details of term deposits in ICICI Bank:
PNB: PNB (Punjab National Bank) is one of the oldest bank in India. It commenced its operations on April 12, 1895. During the long history of the Bank, 7 banks have merged with PNB. Minimum tenure for Single Domestic and NRE term deposits is 7 days while maximum tenure is 10 years.
Given below is a chart showing the details of term deposits in PNB:
Axis Bank: Axis Bank is India’s third largest private sector bank. It has around 3,589 domestic branches and 13,977 ATMs across India as on 31st December 2017. Here, an individual can start a fixed deposit with a minimum investment of Rs 5,000 through the Internet or Rs 10,000 through branch offices. For fixed deposits with a period of six months and above, the rates of interest will be calculated on a quarterly basis. Minimum tenure for Single Domestic term deposits is 7 days while maximum tenure is 10 years.
Given below is a chart showing the details of term deposits in Axis Bank:
Post Offices: Post offices also offer an individual to invest in the Fixed Deposit. An individual requires a sum of Rs 200 to open a Fixed Deposit account in it. Minimum tenure for term deposits is one year while maximum tenure is five years.
Given below is a chart showing the details of term deposits in Post offices: