If you are considering investing in an FD, here is a list of India’s top banks — including the State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, PNB, Bank of India, Union Bank, Kotak Mahindra Bank, and Yes Bank — currently offering the most competitive interest rates.
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The simplicity and transparency of investments, along with assured returns, various tenure options, and high liquidity, render fixed deposits (FDs) one of the most favored investment vehicles in our nation. This is particularly true for risk-averse investors, such as senior citizens, who often depend on the returns from FDs to cover their daily expenses.
The Reserve Bank of India has thankfully maintained the repo rate at 6.5% for the ninth consecutive time this month, prompting many banks to even hike their FD interest rates. Because of the RBI stance, several public, private and small finance banks continue to offer above-average FD interest rates.
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Investors may contemplate allocating a portion of their capital to the FDs of these banks, provided they conduct a comprehensive risk assessment and ensure alignment with their return expectations and risk appetite. Furthermore, employing the ‘FD laddering’ strategy can enhance investment outcomes. This approach involves dividing your investment into multiple FDs, ideally across several banks, with varying tenures, thereby creating an investment cycle rather than consolidating all funds into a single FD.
For instance, if you intend to invest Rs.5 lakh, instead of placing the entire amount in a single 5-year FD, you could segment the corpus into five FDs of Rs.1 lakh each, with tenures of 1, 2, 3, 4, and 5 years, respectively.
It is also advisable to reinvest your FDs upon maturity, if feasible, to establish an investment loop. This strategy would enable you to take advantage of potentially higher returns in the future while reducing the necessity to prematurely close an FD and forfeit interest income to address any financial needs.
Therefore, if you are considering investing in an FD, here is a list of India’s top banks — including the State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, PNB, Bank of India, Union Bank, Kotak Mahindra Bank, and Yes Bank — currently offering the most competitive interest rates.
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