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ULIP INSURANCE

Fixed deposit (FD) rates compared: What are the rates of SBI and ICICI Bank

Jagrity Sharma Jagrity Sharma 25 September 2019

FD interest rates differ across banks. Hence, it is better to compare the interest rates before you decide to invest in fixed deposits.

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Bank fixed deposits generally give you a return ranging from 4% to 7%, depending on the term and bank you choose. Bank FDs continue to be popular among investors as it is considered to be the safest investment avenue with insurance cover of Rs. 1 lakh per person, per bank. Most of the banks, including the State Bank of India, ICICI Bank, Kotak Mahindra Bank, and HDFC Bank, offers fixed deposits ranging from 7 days to 10 years. All top banks in India are revising their interest rates after the Reserve bank of India have reduced the repo rate for the fourth time in a row in the month of August 2019.

Here is the comparison of fixed deposit rates offered by SBI, ICICI Bank, Axis Bank, HDFC Bank, and Kotak Mahindra Bank for different maturity periods.

SBI FD Interest rates

The State bank of India, country’s one of the largest lenders, revised their interest rates on fixed deposit effectively from 10th September.

Fixed Deposit TermInterest Rate
7 days to 14 days4.5%
46 days to 179 days5.5%
180 days to less than 1 year6.0%
1 year to less than 2 years6.70%
2 years to less than 3 years6.50%
3 years to 10 years6.25%

ICICI Bank FD interest rates

ICICI Bank offers fixed deposit rates ranging from 4% to 6.5% for short-term deposits. Following are the interest rates effective from 20th September 2019

Fixed deposit termInterest rate
7 days to 14 days4%
15 days to 29 days4.25%
30 days to 45 days5.25%
46 days to 60 days5.75%
61 days to 90 days5.75%
91 days to 120 days5.75%
121 days to 184 days5.75%
185 days to 289 days5.75%
290 days to less than 1 year6.00%
1 year to 389 days6.25%
390 days to less than 18 months6.60%
18 months to 2 years7.00%%
2 years 1 day to 3 years6.90%
3 years 1 day to 10 years6.90%

How to choose the best FD scheme?

Following are some crucial aspects that you should consider to maximize your return while investing in a fixed deposit. Fixed deposit rates: The rate of interest for a specific term carries primary importance for investors. Many banks provide high fixed deposit rates for different terms. To choose the best FD option, first, you should have a specific financial goal in mind. Once you have a certain financial goal in your mind, you should look for a bank offering the best fixed deposit rates for the term you can stay invested in.

FD term: As mentioned above, the term for which you can deposit your money is a critical aspect while choosing the best fixed deposit option. Banks generally provide fixed deposit term ranging from 7 days to 10 years. It is advisable to invest in term deposit depending upon your financial goal.

Another critical aspect you should keep in mind while choosing an FD term is the interest rate regime. If the interest rates are going to rise in the future, you should invest in for short-term. On the flipside, in case you expect a fall in interest rate regime, you should stay invested from a longer term to take advantage of the current higher interest rate.

Credibility: It is an essential aspect while investing in FD to check the credibility of fixed deposit provider. Even though bank FD is a secure investment option under depositor insurance program for an amount up to Rs. 1 lakh. Hence, it is wise to check the credit rating of the FD provider before investing your lump sum money.

Premature withdrawal: You’ll have to pay the penalty if you liquidate your fixed deposit before maturity. Banks usually charge penalty by lowering the fixed deposit rates by 0.5% to 1%. While choosing a bank to invest in FD, it is advisable to look for banks that impose a lower penalty on such premature withdrawals. To be on the safer side, it is advisable to invest money in more than one FD rather than blocking a lump sum fund in a single deposit.

Recommended Read: SBI vs Axis Bank vs PNB Fixed Deposit Rates

Jagrity Sharma
Written by Jagrity Sharma
A bibliophile who hates alliterations, but loves cream, comics and content immensely! On another note, a content marketer who leverages the power of words to explain...almost anything!