India Deposit Rates
About Financial Investment
Presently, the different banks as well as the post office branches offer an individual with ample opportunity to invest his or her money. The varied kinds of investment options include fixed deposits, saving schemes, postal scheme, government bonds and many more. Most of these schemes even get an individual, a significant return on the invested capital. Following are some of the popular investment schemes:
Fixed Deposits can be done both on nationalized and private banks as well as post offices. The rate of interest varies from one place to another though. The interest rate even varies on the duration of maturity as well. A fixed deposit rate can be as high as 9.5 % or even more in case of some private banks. Senior citizens are even provided with a high rate of interest than the ones provided to a person who is not a senior citizen of India. Let us have a quick look at some of the fixed deposit rates offered by the different banks from the table mentioned below:
| Sl. No. | Name of Bank | 1 year to 2 years | 2 years to 3 years | 3 years to 5 years |
|---|---|---|---|---|
| 1 | Allahabad Bank | 9.00% | 9.00% | 8.75% |
| 2 | Bank of Baroda | 9.00% | 9.00% | 8.50% |
| 3 | Canara Bank | 9.50% | 9.25% | 9.00% |
| 4 | Dena Bank | 9.60% | 9.25% | 9.25% |
| 5 | Indian Bank | 9.25% | 9.25% | 9.00% |
| 6 | Axis Bank | 9.25% | 8.50% | 8.50% |
| 7 | HDFC Bank | 9.00% | 9.25% | 8.25% |
| 8 | IndusInd Bank | 9.00% | 8.75% | 8.75% |
| 9 | Citibank | 9.00% | 8.75% | 8.75% |
| 10 | HSBC Bank | 9.00% | 8.10% | 7.50% |
Government Bonds: A government bond, issued by the government of a country, is generally denominated in the currency of the respective nation. Such a bond is said to be a risk-free bond since taxes can be redeemed by the country's government on the maturity of the amount. In between the period of 1998 and 2011, the 10 Years' Government Bond Yield averaged 7.92 %. However, the latest rate of interest reported in the nation was 7.5 %. A Government Bond can have tenure of some days to even more than 30 years. Based on that, they are even called long term bonds (2 years to 30 years) or short term bonds (91 days to 364 days). Usually issued by a bank, the investors receive semi-annual or annual interest. The Government of India usually issues such a bond on a minimum investment of INR. 10, 000. Government Bonds can be of the following types:
- Bonds with put or call options
- Capital Indexed Bonds
- Fixed Rate Bonds
- Floating Rate Bonds
- Zero Coupon Bonds
| Sl. No. | Name of Scheme | Investment Limits | Rates of Interest and Duration | Salient Features |
|---|---|---|---|---|
| 1 | Post Office Savings Account | Minimum INR. 50/- | 4.0 % per year on joint as well as individual accounts | Tax free interest and cheque facility |
| 2 | Post Office Time Deposit Account | Minimum INR. 200/- and later in multiples of this amount with no upper limit | Interest calculated quarterly but payable annually For 1 year: 7.70 % For 2 years: 7.80 % For 3 years: 8.00 % For 5 years: 8.30 % | With an option of being opened by a person, this scheme helps in tax saving under Income Tax Act Section 80 C in India |
| 3 | 5 Year Post Office Recurring Deposit Account | Minimum INR. 10/- in every month or an amount leading to multiples of INR. 5/- without any maximum limit | INR. 10/- account after maturity fetches INR. 738.62/- and can be re-invested again for another 5 years on yearly basis | Post 1 year, even 50 % of the total balance can be withdrawn. Advance deposits of 6 months and 12 months earn rebate. |
| 4 | Post Office Monthly Income Account Scheme | Amount needs to be multiples of INR. 1, 500/- and joint account holders can make a maximum deposit of INR. 9 lakhs whereas, for single account holders, the maximum limit is INR. 4.5 lakhs | 8.2 % per year (W. e. f. 01.12.2011) Maturity period: 5 years | Premature encashment can be done post completion of 1 year with applicable conditions. M. I. S. accounts started on or after 1st December, 2011 do not qualify for bonus. |
| 5 | National Savings Certificate (VIII issue) | Minimum INR. 100/- and in multiples without any upper limit | Post 5 years, INR. 100/- increases to INR. 150.90/- | Deposits as well as interest qualify for tax saving as covered by the Section 80 C of the Indian I. T. Act. Can be bought by an individual or for a minor or on behalf of minors. |
| 6 | 15 Year Public Provident Fund Account | Maximum INR. 1, 00, 000/- and minimum INR. 500/- in a business year with the facility of making deposits in 12 months or in lump sum | 8.6 % per year (W. e. f. 01.12.2011) | Post 3rd financial year, loan facility is available and after the 7th financial year, withdrawal can be made on a yearly basis. This scheme along with its interest is tax free as per the Indian I. T. Act's Section 80 C. |
| 7 | Senior Citizen Savings Scheme | A single deposit in multiple of INR. 1, 000/- without exceeding INR. 15 lakhs | 9 % per year payable from deposit's date on 31st March or 30th September or 31st December and interest will be payable on each quarter end of a year | An individual can operate multiple accounts or joint account with spouse. After 1 year, premature closure can be done on a deduction of 1.5 % of interest and if done so after 2 years, interest deduction will be 1 %. T. D. S. gets deducted from the interest at source in case the amount of interest exceeds INR. 10, 000/- p. a. Tax benefit, according to the Section 80 C of the I. T. Act of India, is even available with this scheme. |
Private Banks' Rates
The rate of interest, offered by the private banks in India in case of both saving deposits as well as loans, varies from that of the nationalized or the public sector banks or post offices. Apart from varying from one private sector bank to another, the interest varies from the nature of the deposit or loan as well. However, every bank maintains a base rate as fixed by R. B. I. (Reserve Bank of India), below which they are not allowed to grant loans or offer saving deposits.
Loan Rates in Private Banks: The latest base loan rates, which were being followed by some of the private banks in the country since the month of August, 2011 are given in the below mentioned table:
| Sl. No. | Name of Bank | Base Rate |
|---|---|---|
| 1 | Axis Bank | 10.00% |
| 2 | HDFC Bank | 10.00% |
| 3 | ICICI Bank | 10.00% |
Savings Rates in Private Banks: Around the starting of November, 2011, some private sector banks increased their interest rate of savings deposits. Based on 6 % points, YES Bank, one of the private banks raised its rate of saving deposits by 200. A number of banks like Kotak Mahindra Bank or Ratnakar Bank of Kolhapur has fixed their rate of savings deposit at 5.5 %. Among them Kotak Mahindra Bank offers this interest rate for saving deposits amounting below INR. 100, 000/- and 6 % above this amount. However, the interest rate varies from one bank to another.
Last Updated on 12/29/2011
