With the series of hikes in repo rates from the Reserve Bank of India, major banks and NBFCs have increased their interest rates for both borrowings and deposits.
Several public and private sector banks have sharply hiked the interest rate on Fixed Deposit schemes.
And here are the two major Government banks that are offering 8.05 per cent interest rates on select FD schemes.
Punjab National Bank
Punjab National Bank offers a whopping 8.05 per cent interest rate to super senior citizen FD holders of 666 days deposit scheme.
Whereas, senior citizens are getting a return rate of 7.55 per cent and general citizens are getting an interest rate of 7.25%.
However, the 666 days deposit scheme is only for super senior citizens and not for normal investors.
Union Bank of India
Union Bank of India is offering an interest rate of 8.05% on the FD maturing in 3 years. Furthermore, senior citizens will get an interest rate of 7.80 per cent.
While general investors will earn at a rate of 7.30 per cent interest rate.
The major benefit of this scheme is that the interest rate offered for normal investors is also high in comparison to what is for senior citizens.
RBI to Pause Interest Rate Hike
“It is highly possible that the Reserve Bank of India would extend a long pause for a hike in interest rates and then start reducing the same.
We would therefore urge investors to look to invest in long-term deposits.
Recently, the RBI held interest rates steady and did not hike rates as was largely expected,”
“The RBI’s decision to keep the repo rate unchanged is expected to provide a much-needed boost to the NBFC sector and gives clarity on the overall direction the RBI is heading towards.
This allows financial planning and maintaining borrowing costs not just for financial institutions but also for retail customers who have seen their EMIs rise significantly.
Therefore, the pause button on the repo rate hikes should support the existing growth momentum in the NBFC sector,” said Aalesh Avlani, Founder, of Credit Wise Capital.
Top 3 Banks giving High Interest Rate on Tax Saver Fixed Deposits
Tax-saving deposits are prevalent among risk-averse investors who want to reduce their tax burden while seeking decent returns.
Most tax-saving deposits come with a lock-in period of 5 years and allow tax deduction of up to Rs 1.5 lakh per annum under Section 80C of the I-T Act.
Tax-saving fixed deposits pay monthly or quarterly payouts of interest offer return based on the investor’s age; senior citizens get slightly better returns than other age groups.
The risk profile of a typical tax-saving FD investor is usually moderate, so list five public banks that offer the highest returns on tax-saving deposits.
Union Bank of India
The public lender tweaked the interest rate on fixed deposits effective November.
It now offers a 6.7% interest rate on tax-saving FDs with a 5-year lock-in period and an additional 50 basis points to senior investors.
So, the interest rate given to senior citizens on a 5-year tax saver Union Bank of India FD is 7.2%.
Canara Bank
Another public sector bank that offers good returns on tax-saver FDs is Canara Bank.
The bank last revised interest rates on October 31, 2022.
The latest interest rate on a 5-year Canara Bank tax-saver FD is 6.50% for the general public and 7% for senior citizens.
“Bank Offers 6.50 % p.a. for Canara Tax Saver Deposit scheme (General Public).
The maximum deposit acceptable is ₹1.50 Lakh,” Canara Bank has mentioned on its website.
Indian Overseas Bank
Indian Overseas pays the third highest interest rate on tax-saver fixed deposits.
The new interest rates became effective on November 11, 2022.
The IOB Tax Saver term interest rates are 6.40% for the general public, 6.90% for senior citizens, and 7.15% for super senior citizens.
