Top 5 Bank FDs: Which banks offer the best fixed deposit rates? Check List

| TOI Business Desk | TIMESOFINDIA.COM | Aug 24, 2024, 18:52 IST

Currently favorable FD rates make it an excellent time to invest ... Read More

Bank Fixed Deposit Rates: Which banks offer the best FD rates? Which are the top 5 bank fixed deposits? Bank Fixed deposits or FDs are a favored investment option for risk-averse investors. Financial experts suggest that the present high interest rate environment may be an ideal time to invest in fixed deposits before the RBI begins to lower rates. However, with numerous banks offering FDs, it can be challenging to determine which ones provide the best returns.

To help you make an informed decision, below is a list of the top 5 bank FDs for tenures of 1 year, 2 years, 3 years, and 5 years as provided by the ET Intelligence Group. Additionally, we provide you with an estimate of how much your investment of Rs 10,000 would grow into when invested in these fixed deposits.

Top 5 Bank Fixed Deposits:

Tenure: 1 YEAR
Bank	Interest Rate (%) Compounded Quarterly	What Rs 10,000 Will Grow Into
IndusInd Bank	7.75	10,798
RBL Bank	7.5	10,771
Bandhan Bank	7.25	10,745
Yes Bank	7.25	10,745
Indian Overseas Bank	7.1	10,729
TENURE: 2 YEARS
RBL Bank	8	11,717
IndusInd Bank	7.75	11,659
DCB Bank	7.5	11,602
IDFC First Bank	7.5	11,602
ICICI Bank	7.25	11,545
TENURE: 3 YEARS
DCB Bank	7.55	12,516
RBL Bank	7.5	12,497
Yes Bank	7.25	12,405
IDFC First Bank	7.25	12,405
IndusInd Bank	7.25	12,405
TENURE: 5 YEARS
DCB Bank	7.4	14,428
Dhanlaxmi Bank	7.25	14,323
IndusInd Bank	7.25	14,323
Yes Bank	7.25	14,323
RBL Bank	7.1	14,217

Source: ET Intelligence Group

For the 1 year tenure, the top 5 bank FDs are from: IndusInd Bank (7.75% interest compounded quarterly, Rs 10,000 would grow to Rs 10,798), RBL Bank (7.5% interest compounded quarterly, Rs 10,000 would grow to Rs 10,771), Bandhan Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 10,745), Yes Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 10,745), Indian Overseas Bank (7.10% interest compounded quarterly, Rs 10,000 would grow to Rs 10,729).

For the 2 years tenure, the top 5 bank FDs are from: RBL Bank (8% interest compounded quarterly, Rs 10,000 would grow to Rs 11,717), IndusInd Bank (7.75% interest compounded quarterly, Rs 10,000 would grow to Rs 11,659), DCB Bank (7.5% interest compounded quarterly, Rs 10,000 would grow to Rs 11,602), IDFC First Bank (7.5% interest compounded quarterly, Rs 10,000 would grow to Rs 11,602), ICICI Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 11,545).

For the 3 years tenure, the top 5 bank FDs are from: DCB Bank (7.55% interest compounded quarterly, Rs 10,000 would grow to Rs 12,516), RBL Bank (7.5% interest compounded quarterly, Rs 10,000 would grow to Rs 12,497), Yes Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 12,405), IDFC First Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 12,405), IndusInd Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 12,405).

For the 5 years tenure, the top 5 bank FDs are from: DCB Bank (7.4% interest compounded quarterly, Rs 10,000 would grow to Rs 14,428), Dhanlaxmi Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 14,323), IndusInd Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 14,323), Yes Bank (7.25% interest compounded quarterly, Rs 10,000 would grow to Rs 14,323), RBL Bank (7.1% interest compounded quarterly, Rs 10,000 would grow to Rs 14,217).

The Reserve Bank of India (RBI) may have decided to keep the repo rate unchanged in its latest monetary policy review earlier this month, but experts believe that this could be the last pause before the central bank starts a series of interest rate cuts.

As a result, bank FD interest rates may gradually decrease in the coming months. While FD investors benefited from the rising interest rates in the past, the same investment strategy may not provide similar returns in a falling interest rate environment.

For those with extra funds or FDs that are about to mature, this could be the perfect opportunity to secure their investments at the current high interest rates. "This is an opportune moment for fixed income investors to lock-in rates at elevated levels. Considering how the case for future rates is balanced between status quo and declines, fixed rate propositions may be favoured over floaters," advises Nirav Karkera, Head Research, Fisdom.

Experts told ET that it is expected that long-term FDs will be less affected by the initial rate cuts, while short to medium-term FDs may experience a more substantial decrease in interest rates. This means that the chances of getting better interest rates when your FD matures in the future are less likely.

NPS vs PPF Calculator: Is NPS Better Than PPF To Become A Crorepati?

NPS vs PPF Calculator: Which is a better investment bet for retirement planning - National Pension System or Public Provident Fund? If accumulating a corpus of over Rs 1 crore is your aim, then both NPS and PPF are seen to be good investments, but which one should you pick? What are the minimum and maximum investment limits for NPS and PPF and what are returns? How do the tax benefits of NPS and PPF compare? We take a look at some PPF and NPS calculations, average returns and other important aspects to compare the two schemes: (AI image)

NPS vs PPF: In NPS the minimum annual investment is Rs 6,000, while there is no upper limit on investments. On the other hand for PPF accounts, the minimum annual investment is Rs 500 and the maximum you can invest in a year is Rs 1.5 lakh. (AI image)

Public Provident Fund Calculator: Assuming that a person starts investing in PPF at the age of 30 and continues to do so till the age of 60, that is for a period of 30 years (15 years minimum lock in plus 3 block extensions of 5 years) or 360 months, then a monthly contribution of Rs 12,500 or an annual contribution of Rs 1.5 lakh with an interest rate of 7.1% will result in a corpus of over Rs 1.5 crore. (AI image)

National Pension System Returns: There are four Asset Classes - Asset class E - Equity and related instruments, Asset class C - Corporate debt and related instruments, Asset class G - Government Bonds and related instruments and Asset Class A - Alternative Investment Funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc. Here we are looking at the average returns over 7 years from Scheme A, Scheme G, Scheme E and Scheme C, as provided by FinFix Research. The average return from Scheme A is at 7.55%, for Scheme G is 7.74%, for Scheme E is 15.56% and for Scheme C it stands at 7.56%. (AI image)

National Pension System Calculator: According to FinFix Research, with a monthly contribution of Rs 12,500/- or an annual contribution of Rs 1.5 lakh, over a period of 30 years you will get a corpus of over 1.7 crore from Scheme A, Scheme G and Scheme C. However, if you are not risk averse and invest in Scheme E, you will get over Rs 9.9 crore at the average return of 15.56%. It’s important to remember that these calculations are based on average returns over a 7 year period. With a 30 year time horizon for investment in mind, the returns are bound to differ. (AI image)

NPS vs PPF tax benefits: The maximum amount of yearly investment in PPF, that is Rs 1.5 lakh, is exempt from tax under Section 80C. Additionally, PPF is a EEE product, which means that the interest earned and the maturity proceeds are fully tax exempt. In case of NPS, tax exemptions up to Rs 2 lakh (1.5 lakh + Rs 50,000) are available. At the time of maturity, 60% of total corpus is tax exempt, the remaining 40% invested in annuity is also exempt, but income earned from the annuity is taxable depending on your tax slab. (AI image)

NPS Vs PPF: The liquidity in both NPS and PPF is low because both have a long lock-in period. While PPF is a risk-free option with its sovereign guarantee, NPS risks depend on the scheme you pick, with the equity option being higher risk. (AI image)

NPS vs PPF: An Indian citizen in the age group of 18 to 70 years can open an NPS account, whereas any citizen above 18 years can open a PPF account. However while NRIs can open NPS accounts, they can’t opt for PPF. (AI image)

NPS vs PPF: In NPS, you have the freedom to choose your investment portfolio, a flexibility not available in PPF. NPS has evolved to offer even greater flexibility, allowing investors to adjust their asset allocation up to four times a year. Importantly, switching between asset classes or changing pension fund managers has no tax implications. (AI image)

NPS vs PPF: For NPS partial withdrawal is allowed only after 10 years. To exit NPS before retirement, 80% of the corpus has to be used in buying an annuity plan. In case of PPF, partial withdrawals are allowed from 7th year onwards under specific conditions. (AI image)

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