Fixed deposit is the most sought-after investment instrument in India. Indian parents start teaching the value of money to their kids from childhood. They also try to impart the culture of savings and investment among their children with the help of piggy banks.
Traditionally, fixed deposit schemes have been the center of investor's attraction. The main reason for this is the consistent return on investment and very low associated risk to the investment.
This article covers all the information regarding fixed deposit current interest rate and the highest interest rate. But let us start with the basic features of an FD. And what affects the FD interest rates in India.
Let us now look at the calculation of fixed deposit interest.
Banks and NBFCs generally calculate FD interest based on quarterly compounding. Therefore, you can reinvest the interest that you earn every three months. Your principal gets increased, and you start making interest on this amount. Let us understand the compounding effect with the help of a simple example.
Suppose you invest Rs. 1,00,000 for one year at an interest rate of 10% p.a. Now, the simple interest on this amount would be Rs. 10,000 for one year. At the same time, what would compounding the interest do to this investment?
Here, you must have observed that compound interest always exceeds the simple interest if the interest rates are the same. With this being established, let us look at the prevailing FD interest rates.
With more and more people investing money, there has been a broader acceptance of private players. A higher interest rate can reduce idle money and mobilize huge sums of deposits into the financial system.
Since banks were the first choice for a fixed deposit, they kept tightening their interest rates. This approach has made way for established NBFCs to attract depositors. Hence, NBFCs pay the highest interest rate on fixed deposits.
If we look at the FD interest rates of 10 years ago and compare them with FD interest 2021, we see a big dip. This fall is because of the gradual reduction in RBIs repo rate. Repo rate is the interest rate at which RBI lends funds to financial institutions.
Over the last decade, the interest rates on bank FD schemes have decreased from almost 9% to less than 5%. On the contrary, many NBFCs are providing FD interest at over 7%. Shriram City fixed deposit interest rate is among the highest in India. You can earn up to 7.75% interest p.a. with Shriram City.
Shriram City fixed deposit interest rate is one of the highest in India. You can earn up to 7.75% p.a. (8.05% if you are a senior citizen).
You can create FDs for a flexible tenure of 12–60 months with Shriram City. If you need funds in between, you can easily withdraw the FD.
You can choose from both of these products as per your requirements.
Cumulative FDs: These do not pay out regular interests. You can reinvest the accrued interest as a part of the principal. In addition to this, you can compound the interest every month. With more frequent compounding, you can expect an increased return on investment.
Non-cumulative FDs: In these types of FDs, you receive in payment the interest accrued at regular intervals. Shriram City provides flexible interest frequency with monthly, quarterly, half-yearly, and yearly interest payouts.
Unlike banks, some NBFCs provide additional interest on the renewal of a fixed deposit that has matured. But, with Shriram City, you can get an additional interest of 0.25% on every renewal.
Usually, banks and NBFCs provide less interest for bulk deposits. But, with Shriram City, if you deposit more than Rs. 5 Crores bulk FD, you can earn up to 8.02% p.a. Interest compounded monthly.
You can invest in fixed deposits with Shriram City by following 4 simple steps.
Step 1 : Fill in your details and verify with OTP.
Step 2 : Choose the scheme that you want to invest in and the FD tenure.
Step 3 : Make instant payment to create your deposit account through online banking.
Step 4 : Fill in your KYC details, nominee details, and maturity instructions. You are all set to invest with Shriram City.
You should select the fixed deposit scheme that provides the highest interest rate and matches your investment objectives. Click here to kick-start your investment journey with Shriram City Union Finance.