The Reserve Bank of India (RBI) is likely to go for a rate cut in its April MPC meeting, which may prompt banks to lower the interest rates on their fixed deposits further. It may be noted that some of the banks and financial institutions have already reduced their FD rates following the 25 bps rate cut by the RBI in February this year. Keeping this in view, it may be the right time for investors to invest in FDs or extend the duration of existing fixed deposits.
A fixed deposit (FD) is an attractive option for those who prefer a low-risk investment as it guarantees a fixed interest rate on the principal amount throughout the deposit’s term, allowing for interest accumulation over time. One significant benefit of FDs is their flexible tenure, which enables investors to manage multiple deposits with different durations.
You may choose to open an FD account with your current bank or select another institution that offers more favorable interest rates. The choice is yours; however, be aware that the process may vary, especially concerning KYC and other documentation requirements if you opt for a bank with which you do not have an existing relationship.
Also Read: Can senior citizens get a home loan? Key factors to consider
Fixed deposits provide a secure way to protect a specific amount while generating a reliable income stream. If you have a lump sum that you do not plan to access for some time, investing it in an FD account is a wise decision. The returns on FDs are stable, as they are not subject to market volatility, ensuring a predetermined interest rate for the agreed duration.
Opening an FD account has become a simple process. You can either use online banking services or visit the nearest branch of your bank. If you decide to open an FD account with the same bank where you hold a savings account, you can avoid the KYC process and transfer funds effortlessly.
Given below is a compilation of several leading banks in India, such as HDFC Bank, SBI, ICICI Bank, Axis Bank, Yes Bank, BoI, and PNB, among others, which offer attractive interest rates on fixed deposits. You should, however, evaluate the interest rates and the term in a bid to choose the option that aligns with your requirements.
» Read More
