Learning Fixed Deposits(FD) Interest Rates in Indian Banks
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What is Fixed Deposits(FD)?
Fixed Deposits (FD) is a system where a person – known as a depositor – deposits a lump sum amount of money in bank at a predetermined fixed period. The longer the period of the fixed deposit, the higher is the interest rate the depositor earns. The number of days an amount may be entered into a fixed deposit scheme ranges from 15 days to 5 years. After maturity period of the fixed deposit, the depositor then acquires the lump sum amount equal to his principal deposit, plus interest thereon.
The Reserve Bank of India(RBI) ensures an effective policy and restriction for the safety of these bank fixed deposits. Interest rates on fixed deposits differ from various banks depending on the maturity periods and the amount of deposits. The amount of fixed deposits range from Rs.10 to as high as 100 million rupees. Interest rates for bank fixed deposits are dependent on the amount of the investment and its maturity period which ranges from 4 to 10 percent. (Effective October 1st 2008, State Bank of India (SBI) offers 10.5% for normal FD and 11% for the senior citizen). Below is a presentation of the interest rate a fixed deposit can yield for a given period of maturity: These rates taken while writing this article. Period of Maturity Annual Interest Rate (in percent)
Interest Rates for Fixed Deposits(FD)
15 - 29 days 4.00%
30 - 45 days 4.75%
46 - 90 days 5.25%
91 - 120 days 6.00%
121 - 180days 8.00%
181 - 364 days 8.50%
1 year – not more than 2 years 9.00%
2 years – not more than 3 years 9.25%
3 years – not more than 5 years 9.50%
Above five years 10.00%
All bank deposits in India are covered with insurance by the Deposit Insurance and Credit Guarantee Scheme of India and is, therefore, considered to be the safest investment form a depositor or investor can work on. Opening a Fixed Deposit Account is like opening a savings account after complying with the requirements where a deposit receipt is given to the depositor and is subject to updating within the period of the fixed deposit. It is necessary to update the account to verify if all transactions have been accounted for correctly.
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9 Comments on this post
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Anonymous said:
If Indian banks go bankrupt, am I insured?
1. If Indian banks ( both nationalised state banks and private Citibank,ICICI) go bankrupt, how much amount will I be insured for as per RBI ?
Are term deposits insured too? ( upto wht amount)?2. Since this is India, does RBI have any laws for limiting time period to recover the money ?
October 8th, 2008 at 4:24 am -
krishnas said:
HI,
Thank you for the comments. RBI doesn’t insure any of the investment in the private banks. That means if ICICI or HDFC go bankrupt, government will not try for the bailout like what happened in the USA. But, in the case of nationalized banks like SBI,IOB,etc. RBI gives 100% insurance for the money you have invested. you need not worry about you money. It will be returned without any problem.
If you have any more doubts, please reply to this comment.
October 8th, 2008 at 7:28 am -
Rohit said:
hi..
i was planning to invest money as Fixed deposit in ICICI bank. Considering the market is so volatile and unsafe…..is my FD insured and safe in Nationalised banks like SBI etc..rather than private banks like ICICI…citibank..
please comment
thanks
rohitOctober 22nd, 2008 at 8:13 pm -
vikash agarwal said:
i am planning to invest Rs.190000.00 as fixed deposit in any of the
nationalised bank ,if in future that bank goes bankrupt then is my investment insured by any govt. institute?October 31st, 2008 at 8:33 am -
ranjan said:
i am planning to invest in SBI tax savings - like ( NSC) .. need clarification on this …
Comment given above:
After maturity period of the fixed deposit, the depositor then acquires the lump sum amount equal to his principal deposit, plus interest thereon.INVEST AMOUNT: 5000
after 5 years can i get 10000 ??? is it taxable count while investment ???every month i pay 5000 for five years, after 5 years i can get 10000 for first investment i take 5000 and again investing 5000. so next five years i will take 5000 for every month .. is it good idea to invest ???
November 10th, 2008 at 4:06 am -
A.V.SUBBA RAO said:
sir, I want to download sbi fixed deposit application form
November 26th, 2008 at 7:34 am -
krishnas said:
You can find the details in SBI’s website http://sbi.co.in/
November 27th, 2008 at 6:15 am -
Sanjay said:
Even deposits in many private banks are also insured.
Please visit:
http://www.investchips.com/2008/09/is-our-money-in-icici-bak-safe.html
November 29th, 2008 at 7:05 am -
patel said:
hi.
I am a NRI my parents live in India i want to fixed some amount like 100000-200000 in my parents account and want a fixed monthly interest in there a/c . so gave me the detail how much monthly interest thay get in mothely gave me a compare chat.
thank you.January 4th, 2009 at 12:10 pm