Early this month, Reserve Bank of India (RBI) cut its repo rate to 6.25 percent. Following this, a few banks have followed suit. A couple of banks have cut their interest rates on term deposits, albeit marginally.
It is even recommended that the depositors who want to lock their savings in fixed deposits can do it now to maximise their earnings before the interest rates are slashed. And the trend has already kicked off.
The banks which have already cut their interest rates on fixed deposits (FDs) in February are DCB Bank and IndusInd Bank.
DCB Bank
Now DCB Bank offers 7.1 percent on 1-year fixed deposit to general citizens and 7.6 percent to senior citizens.
On a two-year fixed deposit, this bank offers 7.5 percent interest to general citizens and 8 percent to senior citizens. On a three-year fixed deposit, the bank offers 7.5 per cent to general citizens and 8 percent to senior citizens.
IndusInd Bank
This private bank has also slashed its fixed deposit (FD) rates effective Feb 24. The bank’s highest interest rate used to be 7.99 percent and 8.49 percent for general and senior citizens, respectively.
Now, it has been reduced to 7.75 percent and 8.25 percent.
The bank now offers 7.75 percent to general citizens and 8.25 percent to senior citizens on one-year fixed deposit. On a two-year-fixed-deposit, the bank offers 7.75 percent and 8.25 percent to general and senior citizens, respectively.
On a three-year term deposit, the bank offers 7.25 percent to general citizens and 7.75 percent to senior citizens, respectively. Meanwhile, it is vital to note that only deposits of certain tenure are revised and not across the board.
Additionally, it is vital to note that interest income on fixed deposits is taxable. Therefore, those taxpayers who fall in 30 percent tax bracket tend to receive less nearly one-third of their interest income in form of taxes.
So, if you are in a dilemma over whether to invest in an FD or PPF, you can check here.
You can check here for the highest interest rates offered on fixed deposits by top 6 banks.
