After three consecutive repo rate hikes by the Reserve Bank of India (RBI), several banks have increased interest rates on fixed deposits (FDs). HDFC Bank, ICICI Bank, IndusInd, IDBI Bank are among the lenders that have increased interest on fixed deposits recently. Small and new private banks are also offering attractive rates to the general public as well as senior citizens. In August, the central bank increased the repo rates by 50 basis points to 5.4 per cent.
So, between Rising FD RatesIs this a good time to invest in Fixed Deposits (FDs). What are market experts saying?
The hardest part of investing is determining the beginning and end of cycles. Vijay Singhania, Chairman, TradeSmart said, “Be it the market cycle or the interest rate cycle, one can get it only on a consistent basis.
Investors can put a hold on their investments in fixed deposits, assuming that the interest rates will be hiked further. They may be right in their calls but given the fluid situation one can never know. If not the full amount then one can start investing partially at the current rates. That way if they don’t reach the top they will be close to the summit, he said.
SAG Infotech MD Amit Gupta said that for senior citizens, new and small private banks are now offering rates up to 7.5 per cent on three-year FDs. A portion of the savings of senior citizens should be invested in FDs that provide liquidity and interest income. If other income is negligible, savings can be used as part of an emergency fund. Though bank FD interest is taxed, most seniors have lower tax slabs, hence their tax liability is minimal or not present at all.
“USDINR continues to depreciate as India’s import cover as a percentage of FX reserves has shrunk for almost 10 months, while the trade deficit is expected to widen. While we have seen the worst inflation in India, interest rate differentials by RBI It is likely to continue increasing its rates to prevent widening. RBI has been very active in the spot market to prevent USDINR from breaching the psychological limit of 80,” said Amit Gupta.
FD Interest Rate Calculator
The interest you can earn on your deposits depends on several factors, including the amount invested, tenure, interest rate, interest calculation frequency and taxation. You can calculate the return on your investment by using the FD calculator.
SBI FD Rates
2.90% to 5.65% (for General)
3.40% to 6.45% (for senior citizens)
HDFC Bank FD Rates
2.75% to 6.10% (for General)
3.25% to 6.60% (for senior citizens)
2.75% to 6.10% (for General)
3.25% to 6.60% (for senior citizens)
IDBI Bank FD Rates
2.70% to 5.75% (for General)
3.20% to 6.50% (for senior citizens)
Kotak Mahindra Bank FD Rates
2.50% to 5.90% (For General)
3.00% to 6.40% (for senior citizens)
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