In early June, the RBI cut repo rate by 25 bps for the 3rd time. Interest rates are on the decline and now stand at 5.75%. This is expected to have an effect on fixed deposit rates sooner or later. But, if you are searching for good FD deals, there are some banks that are still offering attractive interest rates on fixed deposits. Yes, these are banks and not NBFCs. Bank FDs are probably the safest option to earn interest income for the most conservative investors. The risk of capital loss is nil; the principal, as well as interest, are guaranteed. So, let us look at these bank FDs that are offering 8-9% pre-tax interest income annually.
Fincare Small Finance Bank – Fincare SFB offers resident FDs with premature withdrawal facility that have annual interest rates from 8% to 9% in select tenures. So, if you keep the money for anytime above 12 months, you can get 8% rate. If you keep the money for 24 months 1 day to 36 months, you can get 9% rate. Senior citizens get 50 bps (0.50%) more on each tenure. This means a senior citizen can get 9.5% for keeping the money for 24 months 1 day to 36 months!
Fincare also offers attractive interest rates on FDs without premature withdrawal facility. For tenures like 182 days to 365 days, you can get 8% rate. For 2 years 1 day to 3 years, one can get 9%.
IDFC First Bank – IDFC First Bank has interesting card rate for Domestic, NRE & NRO deposits less than Rs 2 crore for the 731 days (2 years) tenure. It offers 8.25% annual interest. The incentive for Senior Citizens will be at an additional spread of 0.50% over the above rate. But do remember, this will not be available for NRE or NRO Fixed Deposits.
In case of premature closure of the Term/Fixed Deposit, interest will be paid basis interest rate applicable at the time of booking the term/fixed deposit, for the corresponding period for which deposit has remained with the bank. Additionally, term/fixed deposit if prematurely closed, would be subject to ‘Premature Closure Penalty’ as prescribed by the Bank on the date of deposit. Across banks, we have seen the penalty for premature closure of Fixed Deposit is around 1%.
DCB Bank – DCB Bank offers attractive FD interest rates to Resident Indians. A single deposit of less than Rs 2 crore kept for 18 months can fetch you 8.15%. More than 18 months to less than 24 months, you can get 8.05%. The 8.05% rate can be availed of even if you keep FD for 15 months to less than 18 months tenure. The best rate of 8.25% is for 36 months tenure. The penalty for premature closure of FDs is important to know. In DCB Bank, the applicable penalty is 0.50% less than the applicable rate.
DCB Bank offers attractive interest rates on select tenures for NRE FDs (Non-Resident External Fixed Deposits) as well. You can get 8.15% rate for keeping the money for 18 months, which means an effective annualized yield of 8.58% (per annum). Like for Resident Indian customer, NRE FD customers can get 8.25% rate by keeping the money for 36 months and this is an effective annualized yield of 9.25%. Do remember there is an additional benefit to NR Senior Citizens.
RBL Bank – RBL Bank’s attractive interest rate is for Domestic, NRO, NRE & Flexi Fixed Deposits. Here’s how it works. For tenure of 24 months to less than 36 months, you get 8% interest rate (annualized yield of 8.24%). Senior citizens get 8.50% (annualized yield of 8.77%). This rate is for deposits up to Rs 3 crore. For Fixed Deposits above Rs. 3 crore, you will need to contact concerned branch staff as treasury approval may be required.
Do note that RBL Bank says that on a premature full withdrawal of the Fixed Deposit, interest shall be paid at the rate that was applicable on the date the deposit was placed and for the period for which the deposit is maintained with the Bank. Or, the rate that was offered for the original contracted maturity, whichever is lower, subject to a penalty of 1% on such rate. However, there is no penalty for premature withdrawal of Fixed Deposits by senior citizens.
Minimum tenure for NRE Fixed Deposit is 1 year and no interest is payable for deposits prematurely withdrawn within the period of 1 year from the date of deposit. Minimum tenure for Domestic & NRO Fixed Deposits is 7 days and no interest is payable for deposits prematurely withdrawn within the period of 7 days from the date of deposit.