Long-Term Benefits of Fixed Deposits with Interest Rates Starting from 7%

According to RBI data, by the end of March this year, banks have substantially increased their interest rates on fixed deposits (FDs) to over 7% and more. The total share of FDs offering such rates has reached approximately 64.4%, marking a significant rise. 

In March 2023, this share was only 33.7% as per the Reserve Bank. By the end of March 2024, banks offered FDs at a rate of 58.8%, compared to just 30.3% in March 2023. Consequently, term deposits offering interest rates above 8% have now reached 5.5%.

Higher Interest Rates on Fixed Deposits for Longer Durations: Overview of Leading Banks

In India, the government sector’s largest bank, SBI, has increased interest rates on fixed deposits (FDs) for durations exceeding 2 years, ranging from 7% to 8.65%. Meanwhile, HDFC, the largest private sector bank in the country, offers interest rates of 7.25% on FDs ranging from 18 to 21 months.

Among the country’s largest small finance banks, AU Small Finance Bank provides 8% interest on 18-month deposits, Ujjivan offers 8.50% on 15-month deposits, and Suryoday Bank offers 8.65% on a 2-year, 2-day deposit.

Increasing Demand for Deposits by Banks: Appeal to Farmers, Individuals, Families, and Small Traders

Banks are currently witnessing a growing demand for deposits from farmers, individuals, families, and small traders. This trend is driven by the desire for higher returns compared to other investment options such as equity, mutual funds, and debentures, as indicated by credit ratings.

Akash Shrivastav

My name is Akash Shrivastav, and I am a Blogger. I have 8 years of experience in blogging for Finance, Business, Investment, Stock Market, Cryptocurreny and more. Through my writing, I aim to provide readers with insightful and informative content.