An FD account’s maturity period can range from seven days to ten years. A short-term fixed deposit has a maturity period ranging from seven days to twelve months. Fixed deposit interest rates differ with banks, and they are subject to change depending on the key rates set by the RBI. It will also vary depending on the tenure of the FD as well.
Here is a look at the banks that offer the highest interest rate on 1-year FDs.
Recently, SBI bank raised interest rate on FDs under Rs 2 crore having a duration of one year to less than two years has been raised by ten basis points by the bank. With effect from January 15, 2022, these FDs will now earn 5.1 percent (up from 5 percent). Senior citizens will receive 5.6 percent of the total income.
Liquidity is another benefit of the FD. Banks usually offer easy early withdrawal of regular callable fixed deposits, but usually at a cost. Some banks levy a penalty for prematurely closing or withdrawing fixed deposits before the end of the agreed-upon term.
Prematurely withdrawing your FD can cost you money because of the penalty. As a result, at the time of putting the FD, examine the bank’s terms and conditions for premature withdrawal.
Do the calculation before deciding whether or not to break your FD. Calculate how much you will lose due to the penalty, if any, and the fall in effective interest rate (if any) if you withdraw your FD early.