Axis Bank is a leading banking institution. It offers a wide range of fixed deposit schemes for different durations with several advantages over fixed deposits of other banks:
Axis offers simple reinvestment fixed deposits at competitive interest rate which can go as high as 8.5 or 9 per cent depending upon the tenure of the deposit (See the table below). This rate is 0.27 per cent higher than the average 8.73 offered by other banks. It is just 0.36 per cent lower than the highest rate.
These deposits can be opened with a minimum investment of Rs 10,000. Thereafter, you can make additions to your deposit in multiples of Re 1. If you do not want to lock your money for a long duration, you can choose as low as six months or even less as the tenure of your fixed term deposit.
Axis Bank FD Rates on term deposits with maturity is in between 14-29 days at 8 per cent, while in case of 7-14 days the interest rate is 7.5 per cent on bulk deposits above Rs 1 crore.
Axis Bank also has a very customer-friendly method of calculation of interest on your fixed deposits. It calculates interest on a quarterly basis on fixed deposits with tenure of six months& above.
As a Fixed Deposit holder, you can opt for automatic rollovers on maturity (for both the principal and interest). You can select this option in the Account Opening Document (AOD).
Under the ‘Rollover only Principal’ option, only the principal amount of your fixed deposit is rolled over. The interest is either credited to your designated account or paid out. Under the ‘Rollover Principal and Interest accrued in Reinvestment Deposit scheme’, you get both the deposit and the interest accrued for the same tenure at the interest rates applicable on the maturity date.
You have the flexibility to choose periodic interest payments on a quarterly basis, wherein interested is calculated and paid on quarterly rests. You also have the option of premature withdrawal of your deposit any time you wish, you will get interest payment for the period for which the deposit is maintained with the bank at the rate applicable for such period.
But the interest payment on your fixed deposit is subject to tax deducted at source (TDS) as per the provisions of the Income Tax Act. TDS is deducted on the basis of the total interest projected on the aggregate of fixed deposits of the customer, for the financial year.
There is no premature withdrawal penalty on NRE Term Deposits too.
As for other advantages, the interest that you earn on Axis Bank fixed deposit during the previous quarter is added to the principal for calculation of interest. In other words, fixed deposit interest rate on this aggregate amount is calculated every quarter. If the tenure of your fixed deposit schemes is below 6 months, it earns simple interest.
Given the above advantages, it seems fixed deposits offered by Axis Bank is a better option than that offered by most other banks. For one year fixed deposit Axis Bank offers 9% returns and for 6 months, the interest is 8.75%