Q&A

How safe are fixed deposits in Nationalised banks?

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How safe are fixed deposits in Nationalised banks?

Your investment in a bank is insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, which covers your deposits up to Rs. 1 lakh for both principal and interest amount held in the same capacity and same right. So, even if the bank you have an FD in goes insolvent, your money would be safe.

Which is the safest bank in India for FD?

Fixed Deposit Interest Rates

Bank name Tenure Interest rate (\%) per annum
IDFC Bank 91 days to 180 days 6.75
Kotak Mahindra Bank 181 to 363 days 6.5
SBI 180 to 210 days 6.35
Axis Bank 6 months to 8 months 29 days 6.25

Which Nationalised bank is best for fixed deposit?

Best FD Rates in India among Top 10 Banks

  • Axis Bank offers the highest FD interest rate of 5.75\% p.a. which is for a tenure of 5 years and above for the general public.
  • The second highest interest rate is 5.50\% p.a. which is offered by ICICI Bank and HDFC Bank for a tenure of 5 years and above.
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How much can we keep in FD?

You can deposit a maximum Rs 1.5 lakh a year under Section 80C. There is also tax deducted at source (TDS) on FD. If your interest earned from FD is more than Rs 10,000 in a year, TDS will be deducted.

Are fixed deposits safe?

Safety of Funds Invested Fixed Deposit is a safe investment option as opposed to other risk-bearing options since deposits up to Rs. 1 lakh is insured. In an event of the bank defaulting the investor is given a principal amount up to Rs. 1 lakh depending on the amount that was deposited and the insurance cover.

Can you lose money in term deposit?

The short answer is: yes. A term deposit is a safe investment because it’s a fixed rate for a fixed term, and there’s very little chance of you actually losing money.

Which Nationalised bank gives highest interest rate?

Fixed Deposit Interest Rates by Different Banks

Bank Tenure Interest Rates for General Citizens (per annum)
ICICI 7 days to 10 years 2.50\% to 5.50\%
Punjab National Bank 7 days to 10 years 3.30\% to 5.25\%
HDFC Bank 7 days to 10 years 2.50\% to 5.50\%
Axis Bank 7 days to 10 years 2.50\% to 5.75\%
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Are fixed deposits in Indian banks safe?

I will say that most Indian banks are safe most of the times. RBI does its job fairly well and hence, problems if any are more or less very rare. But that doesn’t mean that you can put all banks in the same risk bucket. So your bank Fixed Deposits (FDs) are safe.

Why is deposit insurance compulsory for all banks in India?

This is because the Reserve Bank of India (RBI) has made deposit insurance compulsory for all banks. Your investment in a bank is insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, which covers your deposits up to Rs. 1 lakh for both principal and interest amount held in the same capacity and same right.

Should you invest in NBFCs for fixed deposits?

So, even if the bank you have an FD in goes insolvent, your money would be safe. NBFCs and companies often offer a higher interest rate, when compared to bank fixed deposits, which enables investors to multiply their savings easily. However, before you invest in a company fixed deposit, it is best to check the credibility ratings beforehand.

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Is it safe to invest in FDS in multiple branches?

Your FD investments above Rs.1 lakh in a single bank may not be entirely safe because the cap on deposit insurance is Rs. 1 lakh. So, even if you have FDs in multiple branches of the same bank, all your deposits are totaled and capped at Rs. 1 lakh for insurance purpose. However, there’s a way around this.