The era we are living in is a competitive one. Investments play a vital role in keeping a steady standard of living. However, not every investment yields result at a constant rate. So we search for modes to multiply our earnings at a constant pace. A Fixed Deposit (FD) helps us have a secure investment. It is also popular as a term deposit. Besides, banking institutions proffer such deposits to people at an interest rate lower than that of savings accounts. To invest in FDs you should know which bank is best for fixed deposit? Furthermore, you should look for the plans that are best suitable for you.
Why Opt for a Fixed Deposit?
The trump cards of having a fixed deposit are
Easy Credit Accessibility:
By using fixed deposits you can borrow a loan from the bank. Also, the amount of loan can be up to 70% of the amount present as an FD with the bank.
Assurity of Returns:
Unlike most investment types, FDs assure returns of a certain amount. Furthermore, it is not subject to risks of the market, unlike the stock market. Also, you will get to know the exact value of the amount that you will attain on the maturity of the FD. Hence, you can have a predictable financial goal by opting for an FD. It also helps us to exercise a financial plan that is savings dependant.
Investment free of Risks:
Most of the investments are volatile. They are dependent on economic trends. Moreover, the falls in the market can be difficult on your pocket. However, fixed deposits do not work that way. These are free of risks and will yield you pre-decided results. Also, they are only profitable. You will not witness a loss with an FD.
Fund Withdrawal Flexibility:
The WIthdrawal of fixed deposits is uncomplicated. Furthermore, you can withdraw FDs whenever you have a financial crunch. However, in that case, you will get an amount lesser than that of the maturity date. It comes as a major help in the hour of need.
A Switchover from Cumulative to Non-Cumulative Terms:
The biggest advantage of fixed deposits is the switchover from cumulative to non-cumulative terms. The vice-versa is also possible. That means you can choose the term according to your necessity. For example, if you have certain EMIs to pay, you can use the FD interest by seeking it monthly. On contrary, you can also access the total interest at the end of the tenure. The following table will provide a better understanding:
The table contains the FD interest rates (per annum) of Bajaj Finserv effective from 1st December 2021
| Tenure (in months) | 12 to 23 | 24 to 35 | 36 to 60 |
| Annual and Cumulative | 5.65% | 6.40% | 6.80% |
| Half-yearly | 5.57% | 6.30% | 6.69% |
| Quarterly | 5.53% | 6.25% | 6.63% |
| Monthly | 5.51% | 6.22% | 6.60% |
From the table above, it is clear that annual and cumulative yield the best interest rates. Alternatively, a monthly FD will give you the least percentage of interest rates. Besides, the rates also depend on the tenure of the FD. In the case of Bajaj Finserv, the maximum interest is 6.8% pa. It is for an annual FD of tenure of 36 to 60 months. On contrary, it provides the least rates for monthly FDs of 12 to 23 months tenure.
Comparative Analysis of Fixed Deposits in Various Banks in 2022:
The following table contains the FD interest rates of some of the leading banks of India:
| BANK | INTEREST RATE FOR GENERAL CITIZENS | INTEREST RATES FOR SENIOR CITIZENS |
| State Bank of India | 2.90% to 5.50% p.a. | 3.40% to 6.30% p.a. |
| Bank of Baroda | 2.80% to 5.25% p.a. | 3.30% to 6.25% p.a. |
| HDFC Bank | 2.50% to 5.60% p.a. | 3.00% to 6.35% p.a. |
| Axis Bank | 2.50% to 5.75% p.a. | 2.50% to 6.50% p.a. |
| IDFC Bank | 2.50% to 6.00% p.a. | 3.00% to 6.50% p.a. |
| Canara Bank | 2.90% to 5.50% p.a. | 2.90% to 6.00% p.a. |
From the above table, we can come to the inference that IDFC bank furnishes the best rates of interest than its competitors. The interest rate for general citizens is a maximum of 6%. On contrary, for general citizens, the interest rate is 6.5% per annum. However, the rate is for a tenure of 5years. On the other hand, Axis Bank proffers the second-highest interest rates. It is 5.75% per annum for 5years for general citizens. For senior citizens, they are offering an interest rate of up to 6.5% per annum.HDFC Bank is not far behind. It proffers an interest rate of up to 5.6% to the general citizens. For senior citizens, it is up to 6.35%.
Fixed deposits are the most secure mode of investment. You can invest your money in an FD stress-free. Besides, the attractive interest rates that FDs proffer can increase your savings. Furthermore, the flexible tenure is adding to the benefits it provides. Opt for an FD if you want simple assuring returns on your investment.
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