Want to start a new FD this Diwali? These 4 banks offer up to 7.9% interest on fixed deposits; checklist

India economy


If you want to take full advantage of the high interest rates prevailing in the current market, you should consider tying up part of your savings in fixed deposits. With equity markets falling due to sell-off from foreign investors and Nifty50 already down 8 percent from all-time highs, parking your money in fixed deposits seems like an attractive proposition.

Relying on fixed income instruments is not a bad idea in the current situation. Here we provide an overview of the highest interest rates offered by the best banks for different terms. Some banks offer the highest interest rates on terms of two to three years, while others offer high interest rates on long-term term deposits.

(Source: bank websites)

As we can see from the table above, HDFC Bank offers the highest interest rate of 7.4 percent to common citizens when the loan term is 4 years, 7 months or 55 months. Seniors will be offered an additional 50 basis points under the rates announced on July 24 this year.

ICICI Bank’s highest interest rate of 7.25 percent is offered with a term between 15 and 18 months. Seniors are now entitled to an extra 50 basis points. At the same time, Kotak Mahindra Bank is offering the highest rate of 7.4 percent (7.9 percent for seniors) with a tenure of 390-391 days, as per the rate card announced on June 14 this year.

The Federal Bank offers 7.4 and 7.9 percent (for seniors) as the highest interest rates for two terms: 777 days and 50 months. These rates came into effect on October 16.

State lenders

State Bank of India (SBI) is offering 7 percent (7.5 percent for senior citizens) on a term of 2-3 years as per the latest rates that came into effect on June 15. Another state-owned lender, Bank of Baroda, is offering 7.15 percent (7.65 percent for senior citizens) on 2-3 year fixed deposit as per the rates that came into effect on October 14.

Union Bank of India offers a relatively higher interest rate of 7.4 percent (and 7.9 percent for seniors) with a tenure of 333 days, as per the interest rate chart announced on August 2, 2024.

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