Unlocking Financial Growth Exploring India’s Top High-Yield Fixed Deposit Rates
Fixed Deposits (FDs) are a popular savings tool in India. They offer predictable returns and are a low-risk investment opportunity. Explore the high-yield FD rates offered by various banks and NBFCs. We will focus on Ujjivan Small Finance Bank. Also, explain FDs with monthly payouts and their benefits.
Understanding Fixed Deposits
A Fixed Deposit (FD) is a financial instrument. You deposit a lump sum for a fixed tenor at an agreed interest rate. The interest rate is fixed throughout the tenor. This ensures a predictable return. FDs are preferred by conservative investors. They seek to preserve their capital while earning steady interest.
Why Choose Fixed Deposits?
FDs offer several advantages:
Low Risk
FDs are considered a low-risk investment due to their stability. They are not subject to market fluctuations, making them safer for conservative investors.
Guaranteed Returns
The interest rate is fixed throughout the tenor. This guarantees returns at maturity.
Flexibility
Investors have the flexibility to choose tenors as short as a few months. They can also opt for longer tenors that extend to several years.
Liquidity
Premature withdrawal is possible for fixed deposits. However, it may incur penalties.
Top High-Yield Fixed Deposit Rates in India
Interest rates on FDs vary across banks and NBFCs. Here are some top high-yield FD rates from prominent institutions:
| Issuer | Interest Rate (% p.a.) | Tenor |
| Ujjivan Small Finance Bank | Up to 8.25% | 7 days – 120 months |
| State Bank of India | Up to 7.00% | 7 days – 120 months |
| HDFC Bank | Up to 7.35% | 7 days – 120 months |
| Bajaj Finance Limited | Up to 8.10% | 12 months – 60 months |
| Shriram Finance Ltd. | Up to 8.47% | 12 months – 60 months |
Note: Interest rates are indicative and subject to change. Check with the respective banks/NBFCs for the latest rates.
Ujjivan Small Finance Bank FD Rates
Ujjivan Small Finance Bank FD interest rates are competitive. Here is a detailed look at their current FD rates:
| Tenor | Interest Rate (% p.a.) |
| 7 days – 29 days | 3.75% |
| 30 days – 89 days | 4.25% |
| 90 days – 179 days | 4.75% |
| 6 months – less than 12 months | 7.00% |
| 12 months | 8.25% |
| 12 months and 1 day – 560 days | 8.00% |
| 561 days – 990 days | 7.75% |
| 991 days – 60 months | 7.20% |
| 60 months and 1 day – 120 months | 6.50% |
These rates make Ujjivan Small Finance Bank favourable for high FD returns.
Benefits of FDs with Monthly Payouts
An FD with a monthly payout option lets investors receive interest monthly. This is instead of waiting until maturity. This can be beneficial for:
Regular Income
This option is ideal for retirees. It also suits those seeking a steady monthly income.
Budgeting
An Fixed deposit monthly payout helps you manage your monthly expenses. It ensures you have a regular cash flow to cover your recurring costs more effectively.
Reinvestment
Monthly interest can be reinvested. Investors could use the interest to invest in other financial instruments.
How to Open an FD with Monthly Payouts
To open an FD with a monthly payout, follow these steps:
- Choose the Bank/NBFC
Research financial institutions to find those offering favourable FD rates. Compare their offerings to determine the best option for your investment.
- Decide on the Tenor
Determine how long you want to invest your money. This should align with your specific financial goals.
- Fill the Application
Complete the FD application form. It is available online or at the branch.
- Submit Documents
Provide necessary documents such as ID proof, address proof, and PAN card. These documents are essential for the verification process.
- Deposit Funds
Transfer the investment amount to the bank or NBFC. Ensure the funds are correctly deposited into the chosen fixed deposit account.
- Receive Monthly Payouts
Start receiving interest payouts monthly. These payouts will be credited to your savings account.
Factors to Consider Before Investing in FDs
When investing in FDs, consider the following factors:
Interest Rates
Compare rates across different banks. Compare rates across different NBFCs.
Tenor
Select a tenor that fits your financial objectives. Ensure the investment period matches your future plans.
Premature Withdrawal Penalties
Be aware of penalties for early withdrawal. These penalties may reduce the overall interest earned on your investment.
Insurance Cover
Check if the bank offers deposit insurance for added security. This insurance can provide additional peace of mind for your investment.
Tax Implications
Interest earned on FDs is taxable. Consider the post-tax returns before investing.
Tax Benefits of Fixed Deposits
Fixed Deposits can offer tax benefits under Section 80C of the Income Tax Act, 1961. Here are some key points:
Tax-Saving FDs
These are special types of FDs. They come with a lock-in period of 5 years.
Deduction Limit
Investors can claim a deduction of up to ₹1.5 lakh in a financial year. This helps reduce their taxable income and potentially lower their tax liability.
Eligibility
Only individuals can invest in tax-saving FDs. Hindu Undivided Families (HUFs) are also eligible to invest in these FDs.
Premature Withdrawal of FDs
Premature withdrawal of FDs is allowed but comes with certain conditions:
Penalty
Banks and NBFCs may charge a penalty. This penalty typically ranges from 0.5% to 1% of the interest rate.
Reduced Interest
The interest rate for the period the FD was held may be lower than the original agreed rate. This means the returns could be less than expected.
Procedure
To withdraw prematurely, submit a request to the bank/NBFC. The process may vary slightly across institutions.
Reinvestment Options for FD Maturity Proceeds
Upon maturity, FD proceeds can be reinvested in several ways:
Renewal of FD
Reinvest the principal amount in a new FD. You can also reinvest the earned interest to compound your returns.
Savings Account
Transfer the proceeds to a savings account for liquidity. This ensures you have easy access to your funds.
Other Investments
Consider other investment options. Examples include mutual funds or recurring deposits.
Conclusion
Fixed Deposits remain a preferred savings tool for many Indian investors. High-yield FD rates from Ujjivan Small Finance Bank help investors maximise returns with low risk. FDs with monthly payouts provide the benefit of regular income. By evaluating rates, tenor, and other factors, investors can make decisions suited to their goals. For the latest FD rates, visit Ujjivan Small Finance Bank’s official website.