This demonstrates that FD interest rates with tenures of more than a year is far from approaching the repo rate increase of 2.25% seen. The average interest rate for three-year FDs among the top ten banks is 7.5% p.a. On the other hand, smaller private banks and microfinance companies offer the highest interest rates for 3-year fixed deposits. The average rate of interest for the same ranges from 7-7.25% p.a. Thanks to the new deposit pricing, depositors can now open an FD with attractive rates with public sector banks.
The fact that banks and other financial institutions have now begun to hike their FD interest rates indicates that better days are finally on the horizon. Banks raised the interest rates on FDs across all investment tenures as RBI hiked its key repo rates six times during FY23.ĭecadal low FD interest rates have been a major source of financial hardship for senior citizens, whose primary source of regular income comes from FDs.
Irrespective of the turbulence in the stock markets, fixed deposit investors appear to be doing well because almost all banks now offer deposit rates that outpace inflation. When setting up a fixed deposit account or renewing an existing one, it is crucial to compare the prevailing interest rates offered by various financial institutions. It is not associated with market-related risks, offers income tax deductions and a variety of interest payment options. A fixed deposit is a secure investment choice that guarantees fixed interest rates and special rates for senior citizens.
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