We are ushering in an era where interest rates are going to stay lower for longer. Today, getting 7% interest in fixed deposits is considered good, given that almost all of the big banks in the country are offering just 5.5 per cent. Here are a few banks that still offer 7 per cent interest on bank deposits:
IndusInd Bank Fixed deposits offer an interest rate of 7% on 1 year to 3 year deposits. For tenures above this, the interest rate dips slightly. This is probably the best that it gets when it comes from slightly larger banks in the country.
Investors have the option to apply for the deposits online, which is extremely easy. There is also a tax saver scheme where the deposits are 6.75 per cent, but, here again it is slightly lower than the 7 per cent being offered. Banks tend to compound their interest every quarter, which takes the yields slightly higher when it comes to longer duration fixed deposits. For the short term tenure of 1-year the interest rates are pretty lucrative.
Yes Bank too offers an attractive interest rate of 7 per cent on its 1 and 2 year deposits. This is not bad at all considering the interest rates prevailing. It’s important to remember that bank fixed deposits attract a TDS if the amount of interest crosses the Rs 10,000 mark.
Coming to the safety of opening an account with Yes Bank, things are much better than they were a few quarters ago. The bank has been able to raise as much as 15,000 crores recently, through a follow on public offer of shares. This should provide the much needed capital for the bank. Also, the capital infusion by State Bank of India should also help support the bank.
Coming to the safety aspects of both the banks mentioned above, there is nobody that can predict, how safe banks generally are. Look at what happened with Yes Bank. Good loans suddenly turned bad and the bank had to be bailed out by State Bank of India. The situation may be slightly more aggravated at the moment, given the covid situation.
It’s really difficult at the moment to say with great amount of certainty that it is extremely safe to put in an all banks. Larger banks with better franchisee are much safer that way. Predicting the future, especially for banks, is something that nobody would want to do.