RBL Bank, Yes Bank offer best interest rates
Smaller private banks have reduced interest rates on one-year fixed deposits (FDs) by 25 bps to 50 bps. For instance, RBL Bank has reduced interest rates on one-year FD to 6.10 percent from 6.5 percent earlier. Similarly, Indusnd Bank reduced the interest rate to 6 percent from 6.5 percent on a one-year FD.
Despite falling interest rates, you should invest a certain percentage of your portfolio in FDs offering higher returns on one-year FDs.
Risk-averse investors should prefer investing in FDs due to safety and assurance of returns. However, you should do a thorough risk assessment and due diligence of the bank before investing in FDs.
Smaller private banks are offering 6.1 percent interest rates on one-year FDs, according to data compiled by BankBazaar. For instance, RBL Bank is offering 6.10 percent and IndusInd Bank is offering 6 percent interest rates on one-year FD.
These interest rates are higher compared to those offered by foreign banks and public sector banks.
The interest rates offered by foreign banks Standard Chartered Bank and DBS Bank are 5.30 percent and 4.25pc on one year FDs. The interest rates offered by small finance banks are higher compared to leading private banks. Suryoday Small Finance Bank offers 6.75pc on-year FDs. Ujjivan Small Finance Bank offers 6.50 pc interest on one-year FDs.
Leading private banks such as ICICI Bank and HDFC Bank offers 4.90 percent interest on oneyear FDs. Axis Bank offers 5.15 percent interest.
Kotak Mahindra Bank offers 4.50 percent interest on one-year FD which is the lowest rate among all private banks.
Public sector banks such as Union Bank and Bank of India offer 5.25 percent interest on one-year FDs. Established banks such as SBI and Bank of Baroda offer 5pc and 4.90pc interest respectively, on their one-year FDs.