The presence of fixed deposits (FDs) made revolutionary changes in the investments, particularly in the middle and lower-middle-class of India. But people are now switching to new ways of investments such as stocks, crypto. Amidst the change, let’s not forget your evergreen investment options.

Fixed deposit is considered as one of the safest options of investment, it gives investors a sense of security guaranteed regular income.

If someone who has recently lost her husband receives insurance of Rs 10 lakh, she might not be confident enough to invest in stocks or crypto. Instead, she might prefer fixed deposits which will give her a regular monthly income.

While investing, interest rates play a major role in profit, here we will assist you to get top organisations that provide a good amount of fixed deposit interests rates.

Interest Rates on FDs

The interest rate on FDs has declined within the years, particularly in the government undertaking banks. These interest rates resolve around 5 per cent. We have assembled a list of public sector banks that are giving the best rates on normal FDs below Rs 1 crore:

Union Bank gives 5.4 per cent, Punjab & Sind Bank gives 5.3 per cent, State Bank of India gives 5.3 per cent, Canara Bank gives 5.25 per cent, and Indian Bank gives 5.25 per cent, are the top five public sector banks offering the highest interest rates on two-three years FD. With higher tenure, there will be more interest rates.

If you are not satisfied with this interest rate you may shift towards private sector banks, who gives attractive rates on normal FDs below Rs 1 crore. YES Bank gives 6.25 per cent, IndusInd Bank gives 6 per cent, Development Credit Bank gives 5.95 per cent, and IDFC First Bank gives 5.75 per cent are among private banks offering the highest rates on FDs.

What are Cumulative and Non-Cumulative FDs?

If you do not have to anticipate the requirement of funds until the FD tenure ends, the cumulative FD is a good option for you. As this FD provides you higher interests rate as compared to non-cumulative.

In this FD, interest gained is compounded and is paid with the principal amount at the time of maturity.

In non -cumulative, the interest gained is paid annually, semi-annually, quarterly, or even monthly pay-outs. This type of FD is recommended to those who want regular pay-outs like senior citizens. Notably, they give a lower amount upon maturity of fixed deposits as compared to cumulative fixed deposits.