Different Types of interest rate in Fixed Deposits

One of the most rampant types of investment in India is the Fixed Deposit. It enables one to invest his/her funds for a stipulated period of time with a financial institution at a particular rate of interest. FDs can be of 2 types –

●     Issued by a bank or a NBFC that is regulated by the Reserve Bank of India

●     Issued by a Corporate looking to raise funds from the ‘open’ market

While there are variations in the rates of interests paid against FDs issued by banks and corporates, the latter usually pay a superior rate due to the fact that they carry more risk as compared to bank FDs, and they lack the aspect of easy liquidity generally implied in the former.

Types of interest rates for FDs

At the base level, FD interest rates can either be ‘Fixed’ or ‘Floating’.

Fixed Rate FDs

As understandable, fixed-rate FDs are offered at a fixed rate of interest for a specific deposit period. The investor can hereby look forward to get a definite and assured return as per the contracted rate after the tenure expires, no matter where the base rate in the market stands. The product is safe, guaranteed and built to generate a regular income within the deposit tenure.

Floating Rate FDs

Floating rate FDs are offered at a variable rate of interest for a term. SBI for instance has it on offer. A floating rate deposit, however, comes without a guarantee of sure return as the interest rate is liable to change with a change in the BR or the base rate of the bank. Hence, it is an option which should be picked only if the investor is ready to receive flexible returns. If the base rate increases the investor will gain but if it falls, he/she might wind up losing much more than a fixed-rate investment.

At higher level FD interest rates depend on the following factors –

●     Deposit period

●     Institution type

●     Deposit amount

Most financial institutions offering FDs have an FD interest calculator included in their websites whereby interest to be earned on the deposit money can be calculated easily. Some institutions might refer to the same as ‘Term deposit calculator’ as FDs are also popularly known as Term Deposits.

Depending on the tenure of the FD made, interest rates can be calculated –

●     On quarterly basis (banks in India employ quarterly compounding for calculating interest in Rupees)

●     @ simple interest (mostly seen in FDs that are made for below 6 months)

In instances of premature encashment, the FD interest rate is computed as per the rate that is applicable for actual deposit period, and a penalty may/may not be levied, depending on the institution’s policy.

It’s important to remember that at certain times when the economic scenario of the country reels under high inflation, RBI has the freedom to take up a stringent monetary policy whereby it can enhance its repo rates, that is, its lending rate for banks. In line of that, banks can also hike their loan rates and FD interest rates, both. At these times, FDs are the most lucrative form of investment with high-return and no-risk assured in them.

Compare Fixed Deposit Interest Rate Using FD Calculator for Smart Decisions

Fixed deposits are a popular option when it comes to people’s savings in the country. That’s because banks tend to offer a much higher interest rate on these deposits than your regular savings or current accounts. That’s why you can ensure that your savings grow substantially within a stipulated period of time. The tenure of the fixed deposits can vary, and you can pick the option that’s suited to your requirements. But you have to understand that withdrawing your savings before the maturity period can involve penalties, which you should try and avoid.

Practically all major banks in the country offer fixed deposit options for their customers. However, they can vary to a great extent, which is why certain factors have to be taken into consideration before opting for them. Fixed deposit interest rate is the primary criterion that most consumers think about right at the onset and with good reason too. It will determine the amount you get after the maturity of your fixed term deposit. If you want to make a smart choice amongst various options available to you in the market then you can make the most out of the convenience offered by FD Calculator.

What does the calculator do for you

FD Calculator is a tool offered to you so that you can find out the interest you can earn on your fixed deposit at the end of the tenure. Most banks offer quarterly compounding interest, which can be otherwise tricky to calculate. But with the help of this calculator you can handle the task easily and make sure you are on top of things. Compounding of interest is done on monthly, quarterly, half yearly or yearly basis and once you have taken that into account, you can arrive at the value of your investment on maturity.

Compare different products in the market

As mentioned earlier, practically all the major banks in the country offer fixed deposit schemes for their consumers. Not only are there different tenures for these deposit options, they have corresponding interest rates attached to them, as well. Choosing the right fixed deposit as an investment option for you can be a task, which is simplified with the help of an FD Calculator. Now you have the option of looking at offers from top banks like HDFC, AXIS, ICICI and more, compare the interest rates and make a sensible financial decision.

A convenient option right at your fingertips

The good thing about these interest rate calculators is that you can easily find them online, and they are accessible to you at any time. Using them is quite simple, and you don’t have to have any kind of financial expertise to calculate or compare interest rates on fixed deposits. You can get the job done within hardly any time and thus you can make your investments at the earliest so that you can get optimum benefits out of them. Importantly you will get much needed peace of mind knowing you have made the right decision too.

FD Calculator helps you compare interest rates on fixed deposits so that you can opt for the best deal possible. 

All About SBI FD Rates

State Bank of India is by far the most popular bank used by all sections of society in urban as well as rural India. State Bank of India is not only the biggest public sector banks but is also one with a wide branch network, making it easily accessible. State Bank of India offers fixed deposit accounts along with its core banking operations and services.

Unlike a large number of private banks and non banking financial companies, State Bank of India has a stipulated a small amount of Rs. 1000 as the minimum amount needed to open a fixed deposit account. Users opening a fixed deposit account with State Bank of India have the option to choose the payment mechanism of interest from monthly, quarterly or calendar quarter basis. Interest rate once fixed is does not change irrespective of change in the rate thereafter.

The bank allows individuals to take loans or overdraft facility on their fixed deposit accounts. Loans and OD facility is available for as high as 90% of the fixed deposit account. Senior citizens opening a fixed deposit account with State Bank of India get an additional 0.25% on the stipulated rate of interest. Nomination facility is available and recommended for all fixed deposit accounts in State Bank of India.

SBI FD Rates:

State Bank of India offers lucrative interest rates for fixed deposit account holders. The rate of interest for investments below Rs. 1 Crore ranges from 7.5% for 7 day to 90 days tenure to 9% for 5 years and up to 10 years. Members of SBI Staff and SBI pensioners receive an additional interest rate of 1.00% above the applicable rates. Senior citizens above the age of 60 years receive an additional 0.25% above the stipulated interest rate.

Features of State Bank of India Fixed Deposits:

State Bank of India offers a wide range of tenure period ranging from 7 days to 10 years making FD accounts suitable for all sections of society.  Loan and overdraft facility can be availed without any minimum time limit from the opening of the fixed deposit. Loan can be availed as soon as the ext working day from the day of the opening of a fixed deposit account. Interest is paid on monthly intervals on discounted rate or at a calendar quarterly basis as selected by the individual investor at the time of opening of a fixed deposit account.

 State Bank of India deducts TDS when the interest paid or accrued for the investor exceeds the maximum limit of Rs. 10,000 in one financial year. TDS would not be deducted in case the individual submits form 15G or 15H as per their individual case. State Bank of India offers the individual fixed deposit account holder the flexibility to renew the FD. Automatic renewals take place in case no maturity instructions are given by the investor.

Premature Withdrawal of SBI Fixed Deposits:

State Bank of India charges a premature withdrawal penalty to the tune of 0.50% per annum for all fixed deposits below Rs. 15 Lakhs. In case of fixed deposit accounts higher than Rs. 15 Lakhs that have remained with the bank for a minimum period of 7 days, no premature withdrawal penalty is levied.

How to Apply Fixed Deposit Online

Fixed deposits are one of the most widely used forms of saving and investing money in India. This is mainly because they give a fixed and steady income on the money which is invested. The rate of interest received on Fixed Deposits is higher than the amount of interest given by banks on all their other types of accounts. The term of a fixed deposit would depend on the schemes offered by the bank. If you are looking to open a Fixed Deposit account, there are many options available to you. All reputed banks offer some really good FD schemes. It is always a wise idea to compare your options in order to choose one which would be the most feasible to you.

Apply FD Online

Thanks to the internet, opening a Fixed Deposit account is much easier than it was before. You can now open your Fixed Deposit account by completing most of the work online. You will have to provide a few important details. Here is a simple step-by-step method on how to easily open a fixed deposit account online:

1)      Bank Bazaar is the one stop place where you can compare Fixed Deposit Schemes online and apply for one which you find most convenient to you. They have tie-ups with the best of banks across India. You can find details city-wise or even on a national basis.

2)      Once you open Bank Bazaar’s website, you can click on the fixed deposit tab. From the drop down, you can choose to see details of a specific bank, or you can even take a look at the best rates offered on Fixed Deposits.

3)      You have to customize your search by filling in details of the amount and the number of years or days. You will be provided with details of the rates offered by various banks in accordance with the tenure and amount of fixed deposit you chose.

4)      If you already have in mind a specific bank, there is no need for you to compare the rates offered. What you could do, to save time, is directly check the specified bank’s fixed deposit details.

5)      Once you make your choice, you need to choose the option ‘Apply Now’. You will be provided with a fixed deposit account application for a specific bank’s scheme which you had chosen. You need to fill up the form and hand it in, in the nearest branch office of the bank you chose to open your account it.

6)      Along with the application form which you fill up online you will have to provide identity proof and some other documentation.

You will need one of the following for ID proof:

●     Passport

●     PAN card

●     Voter ID card

●     Driving licence

●     Government ID card

●     Photo ration card

●     Senior citizen ID card

For Address Proof you are required to provide any of the following documents as per the bank’s satisfaction:

●     Passport

●     Telephone bill

●     Electricity bill

●     Bank Statement with Cheque

●     Certificate/ ID card issued by Post office

The documentation which has to be provided might slightly vary depending on the requirements of the bank you carry out your dealings with.

Fixed Deposit Calculator To Compare Different Banks’ Interest Rates

Fixed deposits are a sensible and practical investment option for people today. There are many who might be tempted by the ascent of the stock market, but prefer to keep their investments risk free. That’s exactly what fixed deposits serve as while offering you substantial gains. Hence there are many who look at them as a blessing to grow their savings further and be on top of things. However in spite of their merits you need to make sure you are taking the right decision while investing in them.

Given the popularity of these deposits, you will find that many banks and financial institutions are offering them to consumers today. Some of the biggest Public and Private Sector banks have various fixed deposit schemes that you can benefit from. But how do you decide if a particular option holds more weight for you than the other? That’s where a Fixed Deposit Interest Calculator comes into the picture, offering you much needed clarity as far as your options are concerned. If you want your savings to grow, you have to pay attention to the interest rate you are getting, and that’s just what this calculator helps you assess.

Choose Best FD Rates

To keep yourself informed about what you are getting: Fixed Deposit Calculator is definitely a handy tool for people who want to invest their hard earned money in fixed deposits. While you are told the interest rate for a fixed deposit for the given tenure, knowing exactly what you are going to get when the term ends can be a tough ask. That’s because the interest is often calculated in quarterly compounding rate, which can be tricky to decipher. But with the help of the calculator you can know exactly what your gains are going to look like.

To make a discerning choice:  Most of us invest in fixed deposits because we want our savings to grow in a certain period of time. Fixed deposits have a higher interest rate attached to them than your regular savings accounts. But since there are plenty of fixed deposits options in the market today, choosing the right one for you can become a task. Thankfully now you can rely on Fixed Deposit Interest Calculator to make the job easier for you. It gives you the ability to compare interest rates offered by various banks in the country so that you can make the best pick.

Plenty of options right at your fingertips : Good thing about using these calculators is that you can go through interest rates offered by practically every bank in the country and compare them. Thus you will have access to all the information that might otherwise be difficult to gather. Once you have this information at your fingertips you can choose the right fixed deposit option based on the tenure and the interest rate that you are happiest with. You will also find that this calculator is fairly simple to use, and you can get the job done without any financial expertise.

Fixed Deposit Calculator is all you need to make sure your savings in fixed deposits bring you the results you deserve.

Documents required for Fixed Deposit Account Creation

Fixed deposit accounts can be opened by individuals, Hindu undivided family, sole proprietorship concerns, trusts, associations, clubs as well as partnership firms. Fixed deposit accounts can be opened with any of the private or public sector banks, non banking financial companies and post offices across the country. Accounting opening procedure for fixed deposit accounts has been streamlined by banks and non banking financial companies.

Gone are the days when individuals had to make a number of personal visits to their bank branch to open a fixed deposit account. Existing customers of the bank can now easily open a fixed deposit account online by using their net banking facility on their respective bank website. All banks need to comply with basic KYC guidelines before opening any fixed deposit account. Proof of address, proof of residence and age proof in case of a senior citizen needs to be submitted to the respective bank for opening a fixed deposit account.

Documentation Required for FD Account Opening:  All individuals, trusts, associations as well as proprietorship and private limited concerns need to submit their KYC documentation as per the KYC guidelines issues by the Reserve Bank of India.  For Indian residents banks accept dedicated proof of identity and proof of address for all fixed deposit account holders. For identity proof one can submit any of the documents including passport, PAN card, Voter ID card, Driving License, Government ID card, Photo ration card and/or any senior citizen ID card. 

For address proof any documents including passport, telephone bill, electricity bill, bank statement with cheque and/or any ID issued by post office is acceptable. In case of any other Identity proof or Address proof document can be submitted, subject to the Bank's satisfaction. Individuals will need to show the original documents for verification at the time of account opening while submitting a photocopy each for address proof and identity proof.

Fixed Deposit and Savings Bank Account:   A number of banks prefer individuals to open a dedicated savings bank account with the bank in case of opening of a new fixed deposit account. While this is not mandatory as per RBI rules, savings bank account offers the users the convenience to open any fixed despot account online without any physical visit to the bank branch. A savings bank account also helps the bank to transfer the earned interest amount in the bank account of the individuals. 

In case of termination of the fixed deposit after the completion of its tenure period, funds are easily transferred to the savings bank account of the individual. The linking of a savings bank account with the same bank branch also helps in availing any loan or overdraft facilities on the fixed deposit. In case such a request is made by the individual, the bank can easily link the deposit to the bank account streamlining the loan facilitation process.

In case the customer does not have a savings bank account with the bank, the bank usually opens a loan account for loan request against the fixed deposit making it a time consuming affair requiring multiple visits to the bank branch. Other advantages of having a savings bank account linked with the fixed deposit account is the availability of sweep-in and sweep-out facilities.

Fixed Deposit Schemes with Higher Returns

Fixed deposits have been one of the most widely used investment vehicles in India for a long time. From the most conservative investor to the high risk taking one, everyone has invested some funds in a fixed deposit scheme for a rainy day. The secured nature of the investment and higher interest rates than savings bank account make fixed deposits an investment vehicle for the masses.

In recent years however fixed deposit accounts have taken a small hit as various state owned agencies introduced tax free bonds. Such bonds offered assured returns at a better interest rate than conservative fixed deposits making them quite popular with the masses. Banks are also now starting to fine tune their fixed deposit accounts offering better rate of interest for various schemes with different tenure periods. Let us take a look at some of the fixed deposit schemes offering higher returns.

Fixed Deposit

Special Maturity Date Fixed Deposit Schemes:

The growing competition in the fixed deposits market, as well as an increase in the number of safe investment avenues, banks and non banking financial companies, have introduced various fixed deposit schemes offering a higher rate of interest. These schemes often have a unique maturity date 444 days, 555 days or even 1111 days. All such fixed deposit schemes work and operate like normal fixed deposit schemes but with a better rate of interest.  Both public sector banks and private banks have received good feedback for such specially designed fixed deposit tenure schemes in the past. Punjab National Bank for example offers an interest rate of 8.75% for fixed deposits over 1 year and up to five years while offering a 9% rate of interest for a 4000 day deposit.

Senior Citizen Fixed Deposit Schemes:

All public sector and private banks have a special rate of interest for senior citizen fixed deposit accounts. The age limit to be eligible for senior citizen rate of interest for fixed deposit accounts is 60 years for men and 58 years for women. Normal citizens can also considering investing in fixed deposit accounts in the name of their parents or elders to attract higher and more lucrative interest rates.

Company Fixed Deposit Schemes:

Company fixed deposits are a better way to increase the overall rate of interest compared to traditional bank fixed deposits. While company fixed deposits offer a higher interest rate, they are a high risk investment due to their unsecured nature. With high risk come high rewards and users can consider putting some part of their overall investment in company fixed deposits.

Post Office Fixed Deposit Schemes:

Just like public and private banks, post offices all across the country also offer fixed deposit investment schemes. The government has recently increased the rate of interest for all fixed deposits under the post office making it lucrative for the semi urban and rural citizen. Interest rates on fixed deposit schemes offered by post offices have been increased as much as 0.2 per cent compared to bank fixed deposits.