Money and banking are part of our daily lives. Starting from depositions money, to paying our phone bills, we are heavily dependent on banking these days. However, before one can avail these privileges, one must have an account in a bank and deposit money. A deposit is a certain amount of money that we put in a bank account, which the bank keeps safe for us in exchange for a nominal fee, as well provides interest on the sum; depending on the type of account we choose. Bank deposits tend to a lot of purposes. E.g., One might not have the time to save for a long period of time, or one might be able to save a small fixed amount at regular intervals, or one might need to withdraw constantly. Whatever the need be, a bank lets you have your way while safeguarding your finances. Before opening an account, you need to know the types of bank accounts there are. Most banks usually provide you with four account options
- Savings deposit account
- Current deposit account
- Fixed deposit account
- Recurring deposit account
Now let’s take a look at these and understand what each of these accounts is:
Savings Deposit Account:
As its name implies, it’s an account used to save your money. This is primarily used by working individuals who have a fixed income and are looking forward to saving it. Mainly availed by professionals who get a fixed salary, opening a savings account is an easy process. With only a small initial deposit amount, one can open a savings account. However, this amount varies from bank to bank. The interest rate here is in the moderate range and extends over 4-6.5% depending on the bank and amount. Withdrawals can be made using cheques and ATM cards.
Current Deposit Account:
This account is mainly used by big institutions, businessmen and companies, who need to make a large number of withdrawals, as most of their payments are done via their bank account. Since savings account puts a restriction on the number of withdrawals, a current account is their best bet. This account requires a minimum initial amount too, but no interest is paid in the amount in a current deposit account. On the other hand, customers have to pay a certain operating fee. A special feature of this account is the overdraft facility, allowed to a special clientele.
Fixed Deposit Account:
This type of account is for customers who want to save their money for a long period of time. Fixed deposit accounts provide a higher rate of interest compared to all other bank accounts. Hence the main purpose of fixed deposits is to earn a higher rate of interest. Here, you can make a deposit for a fixed period of time; starting from 15 days to 3 years and above. During this time period, one cannot make any withdrawals. FD interest rates range from 5-8.5 % depending on the tenure of your deposit and the bank you’ve chosen.
Recurring Deposit Account:
In this type of account, one has to deposit a fixed amount of money at regular intervals for which they get interested. At maturity, the total amount deposited along with interest on that amount is payable to the bank customer/account holder. However, if one withdraws or terminates before the maturity period, then the amount deposited up till that point of time along with interest, is given. The interest rate here is higher than a savings account but lower than affixed deposit account. Recurring deposit is of three types – home safe account or money box scheme, cumulative or sickness deposit account, and home construction deposit/scheme account.
Fixed Deposit Interest Rates:
This overview of all the bank accounts clearly demonstrates the purpose, functions, convenience, and financial benefits of each type of account. Now, earning more money is what everyone wants, and it’s clearly understandable that which account provides the highest rate of interest.
Fixed deposit account might be your best bet if acquiring more finances us your ultimate goal. It not only saves your money but also earns a higher interest for you. But there are certain factors to be kept in mind about FD interest rates :
- It is a safe form of investment, and the risk factor is very low
- Your money is stored for a fixed tenure (15 days – 3yrs+) and earns interest as well
- You can also get a loan against your fixed deposit. Instead of getting penalized by breaking your FD. You can get a loan up till 90% of your fixed deposit amount.
- FD interest rates are rather flexible.
- The returns on investment are lower compared to other forms of investment
- Cuts down the liquidity of your money for a certain period of time, but provides with a good interest in the end
- The interest earned on your fixed deposit account is taxable.
Best Fixed Deposit Rates:
After having considered all the factors, if you choose to invest in fixed deposit accounts, you need to do proper research on the best-fixed deposit rates provided by various banks. In India, the interest rate is comparatively lower compared to other countries. However, it is still higher than in other forms of accounts. Different banks provide different rates of interest depending on their tenure. Best fixed deposit rates are provided by private banks like axis Bank, Kotak Mahindra and yes bank ranging from (6.5-7.65%)
However, if you want a detailed report of bank FD rates 2019, given below are the details :
Top Fixed Deposit Interest Rates Banks in 2019:
- Axis Bank – 6.75% ( for 6 months to 8 months 29 days)
- Kotak Mahindra Bank – 7% ( for 3 months to 269 days)
- State Bank of India – 6.35% ( 180 to 210 days)
- ICICI bank – 6.25% – ( 61 to 184 days)
- HDFC Bank – 6.25% ( 46 days to 6 months)
- Bank of Baroda – 5.75% ( 91 to 180 days)
- IDFC Bank – 75% ( 91 to 180 days)
- Yes bank – 7.65% ( 2yrs+)
Now that you know about the bank FD rates 2019 and all there is to know about fixed deposit accounts. You can go ahead and invest your hard earned money in fixed deposit accounts and reap the benefits of a secure saving method and high FD interest rates.