Fixed Deposit scheme

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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 Deposit Interest Rates of Banks

A Fixed Deposit, in the terminology of deposits, is defined to be a savings account where an investor gets a fixed interest rate on a given amount of money. This is even referred to as a Term Deposit or a Certificate of Deposit, since, one is being provided with a certificate as a proof of his or her investment. The money invested in such a scheme can not be withdrawn prior to the maturity date of the scheme. If done so, penalty might get levied on the investor.

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 Bank1 year to 2 years2 years to 3 years3 years to 5 years
1Allahabad Bank8.50%8.50%8.75%
2Bank of Baroda8.50%8.50%8.50%
3Canara Bank8.50%8.50%8.25%
4Dena Bank8.50%8.25%8.00%
5Indian Bank8.50%8.50%8.25%
6Axis Bank8.40%8.40%8.25%
7HDFC Bank8.50%8.50%8.25%
8IndusInd Bank8.65%8.50%8.50%
10HSBC Bank7.00%6.75%6.50%

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

Postal Scheme

India Post provides a citizen of the country with many postal schemes, which not just helps one save his or her money but even help them in their tax saving if required. The interest of such schemes vary from 4 % to 9 % or even more depending upon the nature, amount as well as duration of the scheme. The following table provides detailed information about some of the well known deposit schemes offered by India Post:

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.

The latest base loan rates, which were being followed by some of the private banks in the country since the month of 13th April , 2015 are given in the below mentioned table:

Sl. No.Name of BankBase Rate
1Axis Bank9.95%
2HDFC Bank9.85%
3ICICI Bank9.75%

Last Updated on June 13, 2015