These banks are offering fixed deposit interest rates of up to 9.1%: Should one invest in FDs now?

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Utkarsh Small Finance Bank (SFB), City Union Bank and RBL Bank have recently raised their fixed deposit (FD) interest rates. The revised rates are applicable for deposits below ₹2 crore.

Utkarsh SFB implemented revised FD interest rates effective from May 1, 2024. The bank now offers interest rates ranging between 4% and 8.50% for general citizens and between 4.60% and 9.10% for senior citizens.

Here are the latest FD interest rates offered by Utkarsh Small Finance Bank:

Sr. No. Tenure Interest Rates (% p.a.) – W.E.F. May 1, 2024 Regular Interest Rate Annualized Rate Senior Citizens Interest Rate Annualized Rate
1 7 Days to 45 Days 4.00% NA NA 4.60% NA
2 46 Days to 90 Days 4.75% NA NA 5.35% NA
3 91 Days to 180 Days 5.50% NA NA 6.10% NA
4 181 Days to 364 Days 6.50% 6.64% 7.10% 7.27% 7.27%
5 365 Days to 699 Days 8.00% 8.24% 8.60% 8.88% 8.88%
6 700 Days to less than 2 Years 8.25% 8.51% 8.85% 9.15% 9.15%
7 2 Years (730 Days) to 3 Years (1096 Days) 8.50% 8.77% 9.10% 9.42% 9.42%
8 Above 3 Years to less than 4 Years 8.25% 8.51% 8.85% 9.15% 9.15%
9 4 Years (1461 Days) up to 5 Years 7.75% 7.98% 8.35% 8.62% 8.62%
10 Above 5 Years to 10 Years 7.25% 7.45% 7.85% 8.08% 8.08%

(Source: Utkarsh Small Finance Bank)

RBL Bank has also adjusted its FD interest rates for amounts below ₹2 crore, effective from May 1, 2024.

Investors can now avail themselves of the highest interest rate of 8% on FDs maturing between 18 and 24 months.

Senior citizens can get an additional interest of 0.50%, while super senior citizens (80 years and above) receive an extra 0.75%, resulting in rates of 8.50% and 8.75%, respectively.

Here are the latest FD interest rates offered by RBL Bank:

Period of Deposit Domestic & Flexi FD Interest Rates p.a. Senior Citizen Interest Rates p.a. NRE Interest Rates p.a. NRO Interest Rates p.a.
7 days to 14 days 3.50% 4.00% NA 3.50%
15 days to 45 days 4.00% 4.50% NA 4.00%
46 days to 90 days 4.50% 5.00% NA 4.50%
91 days to 180 days 4.75% 5.25% NA 4.75%
181 days to 240 days 5.50% 6.00% NA 5.50%
241 days to 364 days 6.05% 6.55% NA 6.05%
365 days to 452 days (12 months to less than 15 months) 7.50% 8.00% 7.50% 7.50%
453 days to 545 days (15 months to less than 18 months) 7.80% 8.30% 7.80% 7.80%
546 days to 24 months (18 months to 24 months) 8.00% 8.50% 8.00% 8.00%
24 months 1 day to 36 months 7.50% 8.00% 7.50% 7.50%
36 months 1 day to 60 months 1 day 7.10% 7.60% 7.10% 7.10%
60 months 2 days to 120 months 7.00% 7.50% 7.00% 7.00%
Tax Savings Fixed Deposits (60 months) 7.10% 7.60% NA 7.10%

(Source: RBL Bank)

City Union Bank revised its FD interest rates

for amounts below ₹2 crore, effective from May 6, 2024.

The bank offers interest rates ranging from 5% to 7.25% for general citizens and between 5% and 7.75% for senior citizens.

The highest interest rates of 7.25% and 7.75% are applicable to the tenure of 400 days.

Here are the latest FD interest rates offered by City Union Bank:

Period Rate of Interest % p.a
General Senior Citizens
7 days to 14 days 5.00% 5.00%
15 days to 45 days 5.50% 5.50%
46 days to 90 days 5.75% 5.75%
91 days to 180 days 6.00% 6.00%
181 days to 270 days 6.25% 6.50%
271 days to 364 days 6.50% 6.75%
365 days to 399 days 7.00% 7.25%
400 days 7.25% 7.75%
401 days to 3 Years 6.50% 6.75%
Above 3 Years up to 10 Years 6.25% 6.50%
Tax Saver 7.10% 7.10%

(Source: City Union Bank)

Should one invest now?

With the Reserve Bank of India (RBI) maintaining the repo rate for the seventh consecutive time, stability in interest rates is indicated.

Experts suggest that this stability is advantageous for FD investors, especially those seeking predictable income streams and capital preservation.

While the repo rate pause indicates stability for FD rates, some banks and NBFCs are still increasing rates, capitalising on the transmission window left by previous hikes. Hence, investors might find themselves in a favourable position to secure attractive returns on their investments.

However, it’s crucial to adhere to the principle of limiting FD investments to the extent covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) in India, which typically covers deposits up to ₹5 lakh.

This safeguard ensures the protection of investors’ funds in the event of a bank or NBFC failure.