Most investors prefer fixed deposits (FDs) for short-term motives because they are stable and returns are assured. In the previous year, interest rates on FDs have decreased substantially since repo rates have been steadily reduced by the Reserve Bank of India ( RBI). Consequently, the banks followed the same approach and continued to cut interest rates across tenures on fixed deposits. For a one-year term, FDs are supported with rates of 6 per cent or more by as many as five financial firms and two small finance banks. IndusInd Bank, RBL Bank, IDFC First Bank, Yes Bank and DCB Bank pay interest from 6.5-7 per cent on their one-year FDs.
But on the other side, on 1 year fixed deposits, AU Small Finance Bank typically provides higher rates of 6.5 per cent and 6 per cent respectively by Ujjivan Small Finance Bank. The two largest Indian banks, SBI and Bank of Baroda, provide an interest rate of 5.10%, and on 1 year FD, Axis Bank, HDFC Bank and ICICI Bank have 5.15%, 5.10% and 5%, respectively. On a 1-year fixed deposit, an individual can invest from a minimum of Rs.100 to Rs.10,000. Let’s have a look at several banks offering interest rates on one-year FDs of up to 7 per cent.
|IDFC First Bank||6.75%|
|Ujjivan Small Finance Bank||6.50%|
|AU Small Finance Bank||5.50%|
|Karur Vyasa Bank||5.50%|