Kolkata: Fixed deposits were previously considered the best way to invest for better returns. But currently it is no longer a profitable deal. The condition is that the interest that banks are getting on short-term FDs is getting as much interest on savings accounts.
Banks have had to reduce the interest rate on both short-term and long-term FDs due to excess liquidity and falling credit growth. Because of this, people who want a good return on their investment are turning to risky investment instruments such as debt market mutual funds as well as equity assets.
The country’s largest public sector bank, State Bank of India, is offering interest of 2.9% for FDs of seven to 45 days, which is only slightly lower than the 2.7% interest rate offered by the bank on savings account.
Kotak Mahindra Bank and HDFC Bank are paying less than the rate of interest on savings accounts. Kotak Mahindra Bank is offering 0.50% higher rate of interest to its savings bank customers. At the same time, HDFC Bank and Punjab National Bank pay 0.25% more interest on their savings account than the rate of seven days FD. Senior citizens get 0.50% higher interest rate on FD.
