Even in this age of high returns from equities and mutual funds, Fixed Deposits (FD) have not lost their utility to crores of Indians. In fact, FDs are an evergreen debt instrument to a huge number of Indians due to the fact that they are assured of their interest income – as opposed to market fluctuations in equity and equity-related instruments – and peace of mind.
FDs come in many tenures from 7 days to 10 years. At least one bank is also trying to design an FD with a 20-year tenure. However, in this crowd of maturity periods, Fixed Deposits with a tenure of 1 year are a favourite with a lot of people for a few reasons. FDs maturing in 1 year is neither too short nor too long. A one-year FD provides ample liquidity since one does not have to wait for too long for the instrument to mature.
Significance of 1-year FDs
The window of 1 year is a considerable period to extract the benefits of an FD. It can be an appropriate way to realise short-term financial goals of the depositor. Let’s see what interest rates are offered by 9 major PSU banks on these FDs.
SBI, PNB, Union Bank, BoB, Indian Bank FD rates
State Bank of India (SBI) offers 6.8% interest on 1-year FD for general customers while senior citizens get 7.3%. PNB (Punjab National Bank) pays 6.8% and 7.3% respectively to the two age brackets. Union Bank offers 6.80% and 7.30% respectively to these two age groups.
Bank of Baroda pays 6.85% to non-senior citizens 7.35% to senior citizens while Indian Bank gives 6.10% to general customers and 6.6% to those above 60 years.
Canara Bank, Bank of India, Bank of Maharashtra, Central Bank
Canara Bank pays 6.85% and 7.35% to general customers and senior citizens while Bank of India offers 6.8% and 7.30% to those below 60 and above 60 years respectively. To those above 80 years (especial category), Bank of India pays 7.45%.
Bank of Maharashtra is offering 6.75% to those below 60 years while paying 7.25% to senior citizens on 1-year FDs. The rates of Central Bank are 6.80% and 7.30% respectively for these 2 groups.
