Kolkata: Fixed-income instruments continue to inspire trust and confidence among generations of Indians, especially those who are averse to taking risks such as that associated with the equity markets. In fact, those who are averse to taking risk, and have a limited amount of funds, regularly invest a significant part of their total corpus in in fixed income instruments and depend on the interest generated by these to fund their regular expenditure.

On the other hand, we know that Reserve Bank of India has firmly set the country on a downward path of interest rates. A declinate rate cycle spells trouble for those who are dependent on interest income, since the dipping rate earns less and less income for them, while inflation continues to chip away the real value of the amount generated every month from those debt instruments.

SBI FD tenure baskets, interest rates

The largest bank in the country State Bank of India divides the FDs into several baskets according to tenures. The interest rates SBI pays are – 7 days to 45 days (3.50% general customers and 4% for senior citizens), 46 days to 179 days (5.5%, 6%), 180 days to 210 days (6.25%, 6.75%), 211 days to less than 1 year (6.50%, 7%), 1 year to less than 2 years (6.80%, 7.30%), 2 years to less than 3 years (7%, 7.5%), 3 years to less than 5 years (6.75%), 7.25%, 5 years and up to 10 years (6.5%, 7.5%).

Besides these, SBI has an FD called Amrit Vristi for 444 days. The interest rate on this one is 7.05% for general public while senior citizens get 7.55% and super-senior citizens get 7.65%.

HDFC FD interest rates

India’s largest private sector lender, HDFC Bank, offers the following interest rate on FDs of different tenures. On tenure of 6 months 1 days < = 9 months, the interest rate is 5.75% (for general customers) and 6.26% (for senior citizens); 1 year to < 15 months (6.6%, 7.1%), 18 months to < 21 months (7.05%, 7.55%); 2 Years 1 day to < 2 Year 11 Months (6.9%, 7.4%); 3 Years 1 day to < 4 Years 7 Months (6.75%, 7.25%); 5 Years 1 day – 10 Years (6.5%, 7%).

Post office TD interest rate

What is fixed deposits (FD) in banks are called term deposits (TDs) in post offices. Post office TDs have tenures of 1 year, 2 years, 3 years and 5 years. The interest rates the post office pays on the TDs are 6.90% for one year, 7.00% for two years, 7.10% for three years and 7.50% for 5 years. One significant difference between bank FDs and post office TDs is that the interest rates paid by the post office are the same for both general customers and senior citizens.