The Reserve Bank of India has recently cut the repo rate by 0.25%, leading experts to believe that banks will reduce interest rates on fixed deposits (FDs). As a result, investors have limited time to take advantage of higher returns on FDs before banks start reducing their interest rates. Small Finance Banks are currently offering the highest interest rates on FDs, with Unity Small Finance Bank and Northeast Small Finance Bank offering 9% interest on certain term deposits. Private sector banks such as Bandhan Bank and RBL Bank are also offering interest rates above 8%, while foreign banks like Deutsche Bank are offering 8% interest on certain term deposits.
Public sector banks, on the other hand, are offering lower interest rates, ranging from 7.30% to 7.50%. Small Finance Banks are offering higher interest rates on longer-term deposits, with some offering up to 9% interest on deposits ranging from 1 year to 5 years. Private sector banks are offering higher interest rates on shorter-term deposits, with some offering up to 8% interest on deposits ranging from 1 year to 18 months.
Investors looking for good returns while keeping their money safe may want to consider FD schemes offered by Small Finance Banks, private sector banks, and foreign banks. However, it’s essential to read the terms and conditions of each bank and choose the right option according to individual needs. With the repo rate cut, it’s likely that interest rates on FDs will continue to decline, making it essential for investors to act quickly to take advantage of higher returns.