Best FD Interest Rates by RBI Approved Banks. To curb inflation, the Reserve Bank has increased the repo rate by 2.35% between May and December this year. Due to this, while loans are getting costlier, on the other hand, investing money in fixed deposits is becoming beneficial.
At present, interest ranging from 8 to 9 percent is being given from big government banks to small finance banks. Whereas, in early 2022, FD rates were as low as 5.5%. In such a situation, investing money in FD has become more beneficial in the last 6 months, but if you adopt the right strategy, then you can earn more interest on FD than other investment options…
Competition to increase interest rates in banks
After increasing the repo rate by the Reserve Bank, banks are competing to increase the interest rates. From government banks to small finance banks and NBFCs, they are giving good interest on fixed deposits. Shriram Finance Limited is offering a maximum interest of 9.36% on deposits made by women senior citizens for a period of 60 months.
These banks are giving high interest rate of 8% to 9% on FD
| Bank | Effective | Interest rates for general public | Interest Rates for Senior Citizens | Period |
| Unity Small Finance Bank | November 21 | 8.50% | 9.00% | 181 days and 501 days |
| Ujjivan Small Finance Bank | November 5 | 8.00% | 8.75% | 80 weeks |
| Equitas Small Finance Bank | 14 December | 8% | 8.50% | 888 days |
| Fincare Small Finance Bank | November 9 | 8% | 8.50% | 1000 days |
| ESAF Small Finance Bank | 15 December | 8% | 8.50% | 999 days |
| Utkarsh Small Finance Bank | November 21 | 8% | 8.50% | 2 years 8 months and 25 days |
| Shriram Finance Limited | – | 8.45% | 8.99% | 60 months |
Is it right to break old FD
If there is 6 to 9 months left for the old FD to mature, then breaking it and making a new FD will not be a profitable deal. Banks charge penalty for breaking pre matured FDs. Along with this, you also suffer loss of interest. If these two are calculated, then there will not be any significant advantage in the old interest rate and the new interest rate. Yes, if you have made an FD immediately, then breaking it and doing it at an increased interest rate will be a profitable deal.
Calculate the advantages and disadvantages like this
Let’s say you have an FD of Rs 1 lakh at 5.30% for one year. If you break it then you will get interest at the rate of around 4.60%. Along with this, banks will charge you a penalty at the rate of 0.50% for breaking pre-mature FDs. In this way, you will get around Rs 4,163 as return at the rate of 4.1%. Now you invest Rs 1,04,163 in FD for 2 years at 6.75%. In this case, you will get interest of Rs 14,921. In this way you will get a total of Rs 19,084. If you compare both the FDs, you will get a marginal benefit of around Rs.1973.
