As Reserve Bank of India (RBI) slashed repo rate by 25 basis points after a five-year gap, banks are likely to follow suit.
Therefore, it won’t be long before banks start slashing interest rates they offer on fixed deposit.
Meanwhile, banks have yet not cut interest rates on their deposits so far. So, if you want to allocate some of your funds to a fixed income instrument, you may want to consider locking some money there before the interest rates are slashed.
Typically, banks give higher interest on their long-term fixed deposits and low interest on short term fixed deposits.
Here we list out the interest rates banks offer on their fixed deposits on three-year deposits.
Interest rates on 3-year fixed deposits
HDFC Bank: As the table below shows, the largest private bank offers 7 percent on three-year fixed deposit to general citizens and 7.5 percent to senior citizens.
ICICI Bank: This private lender offers 7 percent on three-year fixed deposit, and 7.5 percent to senior citizens.
Kotak Mahindra Bank: This bank offers 7 percent to general citizens and 7.6 percent to senior citizens.
Federal Bank: Federal Bank offers 7.1 percent interest on its three-year fixed deposit to the general citizens, and 7.6 percent to senior citizens.
Bank of Baroda: Bank of Baroda offers 7.15 per cent interest on its three-year term deposit to general citizens and 7.65 percent to senior citizens.
Punjab National Bank: This private lender offers 7 percent to general citizens and 7.5 percent to senior citizens.
However, it is vital to recall that interest on fixed deposits is taxable. So, if you fall in a high tax bracket, then locking a large sum in fixed deposit (FD) may not be a good idea.
