Three-year fixed deposits (FDs) might be a good option for people who want to lock in their savings before the Reserve Bank of India (RBI) reduces interest rates during the December meeting of the Monetary Policy Committee (MPC).
What is Fixed Deposits(FDs)?
It enables you to earn guaranteed returns on a one-time deposit at a fixed interest rate for a predetermined period. You are not allowed to pull out cash during this period without suffering a consequence.
For the most part, FDs have higher loan fees than standard saving records. Fixed deposits are frequently chosen by investors seeking a minimal risk and a guaranteed return on their investment.
What Will Happen If RBI Cuts Rates?
This is because banks may also see reductions in their lending rates and interest rates on deposits if the RBI reduces the repo rate, which is the rate at which they can borrow money from the RBI.
Different Rates Of Various Banks For FD
The following table lists out all the current rates of seven various banks including both private and PSU banks.
| Bank | General (%) | Senior Citizens (%) |
| HDFC Bank | 7 | 7.5 |
| ICICI Bank | 7 | 7.5 |
| SBI | 6.75 | 7.25 |
| Punjab National Bank | 7 | 7.5 |
| Union Bank of India | 6.7 | 7.2 |
| Federal Bank | 7 | 7.5 |
| Kotak Mahindra Bank | 7 | 7.6 |
Benefits Of Fixed Deposits
- Guaranteed Returns: FDs provide guaranteed returns despite market fluctuations.
- Protection Inclusion: Up to Rs. 1,000 deposits 5 lakh are safeguarded by the Store Protection and Credit Assurance Organization (DICGC).
- Tax reductions: Get a tax break of up to Rs. 1.5 million on tax-saving fixed deposits under Section 80C.
Different Interest Rates For Senior Citizens
As can be seen, the senior citizen FD interest rate at Kotak Mahindra Bank is the highest among the private sector banks, at 7.6%.
The Union Bank of India FD for general population non-seniors currently has the lowest interest rate, at 6.7%.
It is likewise vital to recollect that proper store returns are additionally available and their profits aren’t generally the most noteworthy, particularly when in contrast with other speculation instruments.
