Following this, one private bank has already slashed its savings bank interest rate. There are expectations that most private and state banks will start cutting their interest rates on fixed deposits (FDs) sooner than later.
This is also seen as opportune time to lock your savings in fixed deposits (FDs) before the banks follow suit.
However, experts also recommend to refrain from locking too much money in term deposits since the interest income on fixed deposits is taxable and those falling in the highest tax bracket i.e., 30 percent effectively get less than 5 percent of their interest income on fixed deposits when the interest offered is 7 percent.
However, if you are planning to invest a portion of your portfolio in fixed deposits for one year, these are the top banks and their interest rates offered.
FD interest rates on one year deposits
HDFC Bank: The largest private bank offers 6.6 percent and 7.10 percent interest on one-year fixed deposits to general and senior citizens, respectively.
ICICI Bank: This private lender offers 6.7 percent and 7.20 percent on one-year deposits to general and senior citizens, respectively.
Kotak Mahindra Bank: This private bank offers slightly higher i.e., 7.10 percent to general citizens and 7.6 percent to senior citizens on 1-year term deposits.
Federal Bank: It gives 7 percent to general citizens and 7.5 percent to senior citizens on 1-year fixed deposits.
Bank of Baroda: This bank offers 6.85 percent to general citizens and 7.35 percent to senior citizens on 1-year fixed deposits.
Union Bank of India: This government bank offers 6.8 percent to general citizens and 7.3 percent to senior citizens on one-year fixed deposits.
