The post lists down the rate of **interest on Bank fixed deposits** as of** August 5, 2019**.

You might want to bookmark this page as the FD interest rates would be updated every month. Would help you in better decision making.

Contents

- 1 Fixed Deposit Highlights
- 2 Fixed Deposit Interest Rates
- 3 Interest Rate for FD of Less than 1 Year
- 4 Interest Rate for Fixed Deposit of 1 – 2 Years
- 5 Interest Rate for Fixed Deposit of 2 – 5 Years
- 6 Interest Rate for Fixed Deposit of 5 – 10 Years
- 7 Interest Rate for Fixed Deposit of more than 10 Years
- 8 Small Banks Fixed Deposit Interest Rates
- 9 Helpful Posts on Fixed Deposits
- 10 Fixed Deposit Interest Rate across all Banks
- 11 Bank FD Interest

## Fixed Deposit Highlights

**Most big banks like SBI, HDFC, Axis, have lowered their FD rates.**Its good time to lock FD for long term as rates may go down further.- Most banks offer FDs for
**tenure of 7 Days to 10 Years.** **The Ratnakar Bank & IDBI Bank do offer fixed deposits up to 20 years too**.- For very short Term Deposits the interest rate is similar to that of Savings Account and so you should not worry about FD. Also Interest up to Rs 10,000 in Saving Account is Tax free.
- Most banks
**compound interest quarterly** **Banks offer Loan/Overdraft against the amount available in Fixed Deposit**. The interest is generally 0.5% to 1% more than that offered to FD.**TDS (Tax deduction at source) at the rate of 10%**is deducted, if the interest income is more than Rs 40,000 in financial year per bank (changed from Rs 10,000 limit in Budget 2019)- In case of Senior citizens TDS would be deducted at the rate of 10%, if the interest income exceeds Rs 50,000
- There might be
**penalty for pre-mature withdrawal**of Fixed Deposits

## Fixed Deposit Interest Rates

**The highest interest rate on fixed deposit is offered by IDFC First Bank (2 years) at 8.50%.**

For comparing the best interest rates on fixed deposits over different duration of investment, we have it divided into following 5 slabs:

- FD for Less than 1 Year
- FD for 1 to 2 years
- FD for 2 to 5 Years
- FD for 5 to 10 years
- FD for More than 10 years

We show the highest interest rates on fixed deposits for the above duration buckets. We have also **compared the best interest rates on offer by that being offered by State Bank of India (SBI), ICICI Bank and Post Offices.**

## Interest Rate for FD of Less than 1 Year

**The highest interest rate is offered by Lakshmi Vilas Bank (331-364 days) at 7.75%.**

Bank | Description | Interest Rate |

Lakshmi Vilas Bank | 331-364 days | 7.75% |

Lakshmi Vilas Bank | 181 – 330 days | 7.65% |

Indus Ind Bank | 270 days to below 1 years | 7.25% |

Ratnakar Bank | 241 days to 364 days | 7.25% |

Yes Bank | 9 months to < 1 Year | 7.15% |

J&K Bank | 271 days to less than 1 year | 7.10% |

Ratnakar Bank | 91 days to 240 days | 7.05% |

City Union Bank | 181 days to 364 days | 7.00% |

DCB Bank | 6 months to less than 12 months | 7.00% |

IDFC First Bank | 181 days – 1 year | 7.00% |

Indus Ind Bank | 181 days to 269 days | 7.00% |

Lakshmi Vilas Bank | 151-180 days | 7.00% |

Ratnakar Bank | 46 days to 90 days | 7.00% |

Repco Bank | 90 days – 364 days | 7.00% |

Standard Charted Bank | 181-364 days | 7.00% |

Kotak Mahindra Bank | 280 Days to Less than 12 Months | 6.90% |

Yes Bank | 6 months to < 9 months | 6.85% |

Bandhan Bank | 6 months to less than 1 year | 6.80% |

Tamilnad Mercantile Bank | 271 days – < 12 months | 6.80% |

Allahabad Bank | 333 days | 6.75% |

Axis Bank | 9 months < 1 year | 6.75% |

City Union Bank | 91 days to 180 days | 6.75% |

HDFC Bank | 9 mnths 1 day < 1 Year | 6.75% |

IDFC First Bank | 91 – 180 days | 6.75% |

Karur Vysya Bank | 91 Days to 180 Days | 6.75% |

Kotak Mahindra Bank | 181 Days to 270 Days | 6.75% |

Tamilnad Mercantile Bank | 180 days – 270 days | 6.75% |

Union Bank of India | 10 Month to 14 Month | 6.75% |

Karur Vysya Bank | 181 Days to less than 1 year | 6.60% |

Allahabad Bank | 155 days | 6.50% |

DCB Bank | 91 days to less than 6 months | 6.50% |

South Indian Bank | 92 days to 110 days | 6.50% |

State Bank of India | Government Bank Benchmark | 5.00% – 6.25% |

ICICI Bank | Private Bank Benchmark | 4.00% – 6.75% |

Also Read:21 Hidden Charges in Saving Bank Account

## Interest Rate for Fixed Deposit of 1 – 2 Years

**The highest interest rate is offered by IDFC First Bank (2 Years) at 8.50%.**

Bank | Description | Interest Rate |

IDFC First Bank | 2 years | 8.50% |

Lakshmi Vilas Bank | 450 Days | 8.40% |

Ratnakar Bank | 12 months to less than 24 months | 7.90% |

DCB Bank | 18 months | 7.85% |

Yes Bank | 12 Months 10 Days to 12 Months 20 Days | 7.85% |

DCB Bank | 15 months to 24 months | 7.80% |

Repco Bank | Repco Mahila (18 Months, Exclusively for Women) | 7.80% |

IDFC First Bank | 1 year 1 day – less than 2 years | 7.75% |

Indus Ind Bank | 1 Years 4 Months to below 3 Years | 7.75% |

Yes Bank | 2 years to less than 3 years | 7.75% |

Repco Bank | 1 Year & Above – 2 years | 7.70% |

Indus Ind Bank | 1 Years to below 1 Years 4 Months | 7.60% |

Lakshmi Vilas Bank | 1 Year to less than 3 years | 7.60% |

Yes Bank | 18 Months 8 Days to 18 Months 18 Days | 7.55% |

Bandhan Bank | Above 18 months to less than 2 years | 7.50% |

DCB Bank | 24 months | 7.50% |

Digibank by DBS | 1 year to 15 months | 7.50% |

DCB Bank | 12 months 1 day to less than 15 months | 7.40% |

Bandhan Bank | 1 year to 18 months | 7.35% |

City Union Bank | 1 year | 7.35% |

Deutsche Bank | 1 Year to less than 1.5 Years | 7.35% |

J&K Bank | 1 year to less than 5 years | 7.30% |

South Indian Bank | 1 year to up to and including 3 years | 7.30% |

Federal Bank | 20 months | 7.25% |

Tamilnad Mercantile Bank | 1 Year | 7.25% |

Yes Bank | 1 Year <= 10 years | 7.25% |

Axis Bank | 1 year 25 days < 14 months | 7.20% |

Standard Charted Bank | 18 Months – 2 Years | 7.20% |

Standard Charted Bank | 1yr – 375days | 7.20% |

Axis Bank | 1 year < 1 year 25 days | 7.10% |

HDFC Bank | 1 year 17 days – 2 Years | 7.10% |

IDBI Bank | 1 year | 7.10% |

Karnataka Bank | 1 year to 2 years | 7.10% |

Karur Vysya Bank | 1 year to less than 2 years | 7.10% |

IDBI Bank | >1yrs to 2yrs | 7.05% |

Axis Bank | 14 months < 5 years | 7.00% |

City Union Bank | Above 1 year to 5 years | 7.00% |

Corporation Bank | 666 days only | 7.00% |

DCB Bank | 6 months to 12 months | 7.00% |

Deutsche Bank | 1.5 Years to less than 3 Years | 7.00% |

Dhanalakshmi Bank | 1 Year and above upto & inclusive of 2 years | 7.00% |

Federal Bank | Above 1 year | 7.00% |

HDFC Bank | 1 year – 1 Year 16 days | 7.00% |

Kotak Mahindra Bank | 12 months and above but less than 3 years | 7.00% |

Punjab National Bank | 1 year | 7.00% |

Standard Charted Bank | 376 days < 18 Months | 7.00% |

Tamilnad Mercantile Bank | 1 Year to less than 3 Years | 7.00% |

State Bank of India | Government Bank Benchmark | 6.80% |

ICICI Bank | Private Bank Benchmark | 6.90% – 7.00% |

Post Office FD (1 year) | Post Office | 6.90% |

Post Office FD (2 years) | Post Office | 6.90% |

Click for Best Interest Rate on Recurring Deposits

## Interest Rate for Fixed Deposit of 2 – 5 Years

**The highest interest rate is offered by DCB Bank (36 months), Deutsche Bank (5 Years) & Ratnakar Bank (24 months to less than 36 months) at 8.00%**

Bank | Description | Interest Rate |

DCB Bank | 36 months | 8.00% |

Deutsche Bank | 5 Years | 8.00% |

Ratnakar Bank | 24 months to less than 36 months | 8.00% |

DCB Bank | 36 months to 60 months | 7.75% |

Indus Ind Bank | 1 Years 4 Months to below 3 Years | 7.75% |

Lakshmi Vilas Bank | 3 Years to 10 Years | 7.75% |

Yes Bank | 2 years to less than 3 years | 7.75% |

Bandhan Bank | 2 years to less than 10 years | 7.65% |

DCB Bank | 24 months to 36 months | 7.60% |

Lakshmi Vilas Bank | 1 Year to less than 3 years | 7.60% |

Ratnakar Bank | 36 months to less than 120 months | 7.60% |

IDFC First Bank | 2 years 1 day – 5 years | 7.50% |

Indus Ind Bank | 3 years to below 61 Months | 7.45% |

HDFC Bank | 2 years 1day – 3 Years | 7.30% |

J&K Bank | 1 year to less than 5 years | 7.30% |

South Indian Bank | 1 year to up to and including 3 years | 7.30% |

Deutsche Bank | 3 Years to less than 5 Years | 7.25% |

HDFC Bank | 3 years 1day – 5 years | 7.25% |

South Indian Bank | 3 years and above up to and incl. 10 years | 7.25% |

Yes Bank | 1 Year <= 10 years | 7.25% |

Karur Vysya Bank | 2 Years to less than 3 Years | 7.05% |

Axis Bank | 14 months < 5 years | 7.00% |

City Union Bank | Above 1 year to 5 years | 7.00% |

Deutsche Bank | 1.5 Years to less than 3 Years | 7.00% |

Federal Bank | Above 1 year | 7.00% |

Karur Vysya Bank | 3 Years and above | 7.00% |

Kotak Mahindra Bank | 12 months and above but less than 3 years | 7.00% |

Repco Bank | Above 2 years – 5 Years | 7.00% |

Standard Charted Bank | 2 Years – 3 Years | 7.00% |

Tamilnad Mercantile Bank | 1 Year to less than 3 Years | 7.00% |

State Bank of India | Government Bank Benchmark | 6.60% – 6.70% |

ICICI Bank | Private Bank Benchmark | 7.25% – 7.30% |

Post Office FD (2 years) | Post Office | 6.90% |

Post Office FD (3 years) | Post Office | 6.90% |

Post Office FD (5 years) | Post Office | 7.70% |

Also Read:Where to Park Money for Very Short Term [less than 6 Months]?

## Interest Rate for Fixed Deposit of 5 – 10 Years

**The highest interest rate is offered by Bandhan Bank (2 years to less than 10 years) at 7.65%.**

Bank | Description | Interest Rate |

Bandhan Bank | 2 years to less than 10 years | 7.65% |

Ratnakar Bank | 36 months to less than 120 months | 7.60% |

Lakshmi Vilas Bank | 12 Months to 120 Months | 7.50% |

Indus Ind Bank | 3 years to below 61 Months | 7.45% |

DCB Bank | More than 60 months to 120 months | 7.25% |

IDFC First Bank | 5 years 1 Day – 10 years | 7.25% |

Indus Ind Bank | 61 month and above | 7.25% |

South Indian Bank | 3 years and above up to and incl. 10 years | 7.25% |

Yes Bank | 1 Year <= 10 years | 7.25% |

Digibank by DBS | 5 years and above | 7.00% |

Federal Bank | Above 1 year | 7.00% |

HDFC Bank | 5 years 1day – 10 Years | 7.00% |

Karur Vysya Bank | 3 years and above | 7.00% |

State Bank of India | Government Bank Benchmark | 6.50% |

ICICI Bank | Private Bank Benchmark | 7.00% |

## Interest Rate for Fixed Deposit of more than 10 Years

The Ratnakar Bank and IDBI bank offers fixed deposit of up to 20 years.

Bank | Description | Interest Rate |

Ratnakar Bank | 121 months to less than 240 months | 7.20% |

IDBI Bank | 10 Years to 20 Years | 6.00% |

** Source:** Bank Websites

**Last Updated: August 5**

**, 2019**

**Disclaimer:** The Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD.

## Small Banks Fixed Deposit Interest Rates

The table below compares the interest rate offered by Small banks to that of SBI. The difference is substantial for low tenure deposits. **Fincare Bank (24 months 1 day to 36 months) offers 9% while SBI (for 24 to 36 months deposit) offers 6.70% only.**** **

Banks | <1 year | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years | 5 Year+ |

AU Small Finance Bank | 7.01% | 7.01% | 7.87% | 8.10% | 7.77% | 7.77% | 7.30% |

Capital Small Finance Bank | 7.15% | 7.80% | 7.80% | 7.80% | 7.80% | 7.65% | 7.40% |

Equitas Small Finance Bank | 7.50% | 8.00% | 8.30% | 8.30% | 7.00% | 7.00% | 7.00% |

ESAF Small Finance Bank | 7.50% | 8.50% | 8.50% | 7.30% | 7.30% | 7.30% | 7.30% |

Fincare Small Finance Bank | 7.00% | 8.00% | 9.00% | 9.00% | 8.00% | 8.00% | 7.00% |

Jana Small Finance Bank | 8.50% | 8.50% | 8.60% | 8.50% | 8.00% | 8.00% | 6.75% |

Suryoday Small Finance Bank | 7.75% | 8.35% | 8.75% | 8.75% | 8.00% | 8.25% | 7.25% |

Ujjivan Small Finance Bank | 7.50% | 8.10% | 8.10% | 8.50% | 7.00% | 7.00% | 6.50% |

Utkarsh Small Finance Bank | 7.50% | 8.50% | 9.00% | 7.85% | 7.00% | 8.00% | 7.00% |

SBI | 6.25% | 6.80% | 6.80% | 6.70% | 6.60% | 6.50% | 6.50% |

** ****Updated:**** August 5, 2019**** **

## Helpful Posts on Fixed Deposits

Which bank offers Highest Interest Rate on Bank FD?

13 Most Important things to know before investing in Bank Fixed Deposits

Section 80TTB: Senior Citizens can Save Tax on their Interest Income

TDS threshold on Bank FD increased to Rs 40,000 from April 1, 2019

Avoid TDS: fill Form 15G and 15H

Small Bank FDs offer interest up to 9% – Should you invest?

How SWP in Debt Funds generate higher returns than FD

How to increase bank deposit insurance through Joint accounts?

How Safe is Your Fixed Deposit in Bank?

How you loose Money in Fixed Deposits?

Fixed Deposits that you can use to save Tax

Highest Interest Rate on Recurring Deposits

Understanding Compounding and Yield in Fixed Deposit

How to get Credit card against Fixed Deposit?

7 High Rated Companies Offering more than Bank Fixed Deposits

## Fixed Deposit Interest Rate across all Banks

Earlier we used to provide only the top Fixed Deposit Rates but with several request from readers we have added a summary of FD rates for all banks.

Banks | 1 Years | 2 Years | 3 Years | 4 Years | 5 Years | 5+ Years |

Allahabad Bank | 6.75% | 6.60% | 6.50% | 6.50% | 6.50% | 6.50% |

Andhra Bank | 6.80% | 6.80% | 6.75% | 6.75% | 6.75% | 6.50% |

Axis Bank | 7.10% | 7.00% | 7.00% | 7.00% | 6.75% | 6.75% |

Bandhan Bank | 7.35% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% |

Bank of Baroda | 6.45% | 6.60% | 6.45% | 6.45% | 6.45% | 6.45% |

Bank of India | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% |

Bank of Maharashtra | 6.50% | 6.50% | 6.50% | 6.25% | 6.25% | 6.25% |

Canara Bank | 6.70% | 6.50% | 6.40% | 6.40% | 6.00% | 6.00% |

Catholic Syrian Bank | 7.00% | 6.75% | 6.75% | 6.50% | 6.50% | 6.50% |

Central Bank of India | 6.65% | 6.65% | 6.45% | 6.45% | 6.45% | 6.45% |

Citibank | 5.50% | 6.50% | 6.50% | 6.00% | 6.00% | 6.00% |

City Union Bank | 7.35% | 7.00% | 7.00% | 7.00% | 7.00% | 6.70% |

Corporation Bank | 6.80% | 7.00% | 6.50% | 6.50% | 6.50% | 6.50% |

DCB Bank | 7.40% | 7.85% | 8.00% | 7.75% | 7.75% | 7.25% |

Deutsche Bank | 7.35% | 7.00% | 7.25% | 7.25% | 8.00% | NA |

Dhanalakshmi Bank | 7.00% | 7.00% | 6.50% | 6.50% | 6.50% | 6.50% |

Digibank by DBS | 7.50% | 6.75% | 6.75% | 6.75% | 7.00% | 7.00% |

Federal Bank | 7.00% | 7.25% | 7.00% | 7.00% | 7.00% | 7.00% |

HDFC Bank | 7.00% | 7.30% | 7.30% | 7.25% | 7.25% | 7.00% |

ICICI Bank | 6.90% | 7.00% | 7.30% | 7.25% | 7.25% | 7.00% |

IDBI Bank | 7.10% | 7.05% | 6.90% | 6.85% | 6.85% | 6.25% |

IDFC First Bank | 7.75% | 8.50% | 7.50% | 7.50% | 7.50% | 7.25% |

Indian Bank | 6.75% | 6.60% | 6.75% | 6.75% | 6.90% | 6.50% |

Indian Overseas Bank | 6.60% | 6.75% | 6.80% | 6.80% | 6.80% | 6.80% |

Indus Ind Bank | 7.60% | 7.75% | 7.75% | 7.35% | 7.35% | 7.25% |

J&K Bank | 7.30% | 7.30% | 7.30% | 7.30% | 7.30% | 6.50% |

Karnataka Bank | 7.10% | 7.10% | 7.00% | 7.00% | 7.00% | 6.50% |

Karur Vysya Bank | 7.10% | 7.05% | 7.00% | 7.00% | 7.00% | 7.00% |

Kotak Mahindra Bank | 7.00% | 7.00% | 7.00% | 6.90% | 6.75% | 6.50% |

Lakshmi Vilas Bank | 7.75% | 8.40% | 7.85% | 7.85% | 7.85% | 7.85% |

Oriental Bank of Commerce | 6.85% | 6.75% | 6.75% | 6.70% | 6.75% | 6.75% |

Post Office Time Deposit | 6.90% | 6.90% | 6.90% | NA | 7.70% | NA |

Punjab and Sind Bank | 7.00% | 6.80% | 6.80% | 6.55% | 6.55% | 6.55% |

Punjab National Bank | 6.75% | 6.85% | 6.75% | 6.50% | 6.50% | 6.50% |

Ratnakar Bank | 7.90% | 8.00% | 7.60% | 7.60% | 7.60% | 7.60% |

Repco Bank | 7.70% | 7.70% | 7.00% | 7.00% | 7.00% | NA |

South Indian Bank | 7.30% | 7.30% | 7.30% | 7.25% | 7.25% | 7.25% |

Standard Charted Bank | 7.20% | 7.20% | 7.00% | 6.50% | 6.50% | NA |

State Bank of India | 6.80% | 6.70% | 6.60% | 6.60% | 6.50% | 6.50% |

Syndicate Bank | 6.50% | 6.70% | 6.50% | 6.50% | 6.50% | 6.50% |

Tamilnad Mercantile Bank | 7.25% | 7.00% | 7.00% | 6.90% | 6.90% | 6.90% |

UCO Bank | 6.60% | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% |

Union Bank of India | 6.75% | 6.60% | 6.60% | 6.70% | 6.70% | 6.70% |

United Bank of India | 6.25% | 6.25% | 6.25% | 6.00% | 6.00% | 6.00% |

Yes Bank | 7.85% | 7.75% | 7.75% | 7.25% | 7.25% | 7.25% |

## Bank FD Interest

**The post compares the interest rate across all major banks in India. This would help you choose the best offering across banks and tenures.**

what about Gramin Vikas Banks ?

There are multiple gramin banks in different states. Would be difficult to collate data for them!

What about Deautsche Bank? Is it safe to invest 5 lacks for 5 years?

yes go ahead

axis bank ,missing ji

We have axis bank – scroll down at the last table

What about United Bank of India?

From March we would carry interest rates fro all banks!

Hi Amit,

I checked IDBI Bank interest rate but didn’t find FD for 366 days.

The post mentions IDFC bank & not IDBI bank. Please recheck.

No. The post does mention that IDBI offers highest rate at 8.25%. Please give the right details.

Sorry about that and thanks for pointing out the error. I have corrected it!

Hi Amit,

I have one query on investment on land . Let’s say I buy a land for (Rs 5 lakh) for investment purpose and keep it as it is and sale it after 5 years at price Rs 10 Lakh . What will be the taxation rate for the holding period of 5 years and then when I sale the land ?

You will have to pay capital gains tax. Please use this Capital Gains Calculator for Property

Thanks Amit for the quick response . I have couple of queries on PPF .

1) I have a PPF a/c on my name in SBI and another PPF a/c on my son’s name who is a minor.

Can you please let me know the taxation rule/benefit I will get for both of these PPF a/cs.

2) My wife is a home maker. Will I get any additional benefit if I open a PPF a/c on my wife’s name and i deposit the money on behalf of her (say gift to her) ?

3) In one financial year if I deposit rs 2 Lakh in PPF , will I get 8.1% interest on Rs 1.5 lakh or I will get 8.1% interest on Rs 2 Lakh ?

1. You get benefit up to Rs 1.5 lakhs only as that is the limit for Sec 80C.

2. You would not get any tax benefit as the interest earned is tax free. But by having account in your wife name gives 2 benefits: a> Your PPF investment limit increase 2> The interest earned is your wife’s income and if she invests it further clubbing rule of taxation would not apply. Read: How your wife can help you save taxes?

3. The limit for deposit on PPF has been increased to Rs 1.5 Lakhs per year from Budget 2014. If you manage to deposit more than that in financial year, no interest would be paid on that. You can learn more on PPF here.

Hello sir….I am a student,I want to do fixed deposit of 5 lacs for 3 year..which bank should I choose to get higher return and how much I will get?please guide me

THe post lists the highest FD rates. Choose which is convenient to you!

hi amit,why hdfc bank was not included in fd interest rates.please add it for comparison

Have included banks which give higher interest than SBI/ICICI as they are biggest banks in government/private sector. We would soon expand this list to include other major banks too!

Hi Amit,

Really appreciate your quick response. I have few follow up queries .

May I request to respond them as well ?

Option 1 : Can you please tell me know the calculation how did you get Rs 82,432 interest for 10 lakh FD investment @ 8% interest rate . Also please let me know how did you get Rs 56,961 after tax deduction.

Option 2 : Please tell me calculation for RD deposit also .

Requesting you to tell me the above calculations for my knowledge purpose so that I can calculate them on my own in future.

Option 3 : Thanks for suggesting to for “Arbitrage Mutual Fund”. But I have below query on “”Arbitrage Mutual Fund”” .

a) I am unable to understand how normal mutual fund is different than “Arbitrage Mutual Fund” .

b) For 1 year I should go for Growth or Dividend (Reinvestment/ Payout) option ?

c) Please suggest where and how can I buy “Arbitrage Mutual Fund” ? can I buy it online on my own or I need to go some agency/bank/office to buy them ?

d) Is it advisable to investment the entire 10 Lakh or do an SIP over 1 year ? I am not sure whether SIP option is available in “Arbitrage Mutual Fund” or not .

e) Also please suggest me some good “Arbitrage Mutual Fund” which I should buy .

Thanks again in advance for all your help and suggestion/advice

Hi Amit,

could you please respond to my query ? Thanks …

You can search for any RD/FD calculator online and get your interest numbers. The tax applied is 30.9% on interest earned. There might be slight variation depending on what compounding you choose. For most banks its quarterly.

Ans 3:

a. Arbitrage Mutual Funds invest in arbitrage opportunities available in the market. Learn more at this link.

b. Investing in Arbitrage Fund: Growth or Dividend Reinvestment?

c. You can buy this fund as you buy any other mutual fund – online/offline or through Demat account.

d. There is NO need to do SIP as this is not volatile fund. You can invest in one go.

e. You can look at IDFC/ICICI arbitrage funds

Thanks Amit for your response.

As I understood arbitrage funds can be beneficial if market is too much volatile so that there is any opportunities of arbitrage.

I also read about balance fund which invest both on equity(60 to 65%) and debt (35 to 40%).

I would like to know your opinion on these ? How do you compare balance fund against arbitrage fund for investment for little more than 1 year.

I am alaready having SBI Magnum Balanced Fund and have invested in it since last 2 years. But this is going negative for some time now . Hence I am little confused which one to go for .

Need your suggestion.

Arbitrage Funds DO NOT have negative returns for long periods. The worst I have seen is -0.01% return in 1 month period. So its relatively safe if you consider principal safety.

Balanced funds invest in equities and hence there are chances of negative return and by the same virtue more chances of out-performance when markets outperform.

Hi Amit,

I have one query. I would like to invest around Rs 10 Lakh for one year .

I came to know that Bandhan bank is currently giving the highest FD interest rates of 8% for one year among all the banks . It also offers same 8% interest rates for RD for 1 year .

At the same time, Bandhan bank also gives 4.25% interest rates on savings account for less than 1 lakh balance and 6% interest rates on savings account for more than 1 lakh balance.

Considering that I fall on highest tax bracket(30% slab) , I am wondering which of the below options I should choose to invest for 1 year ?

Option 1 : Invest in FD for 1 year to get 8% interest rate and pay tax on the interest

Option 2 : Invest in an RD for 1 year by depositing every month around Rs 84,000 (= 10 lakh divided by 12 months).

With option 2 , I would get same 8% interest rates from RD . Also I would get the benefit of 6% interest for keeping more than 1 lakh in savings a/c . Also there will be no tax upto Rs 10,000 on the savings a/c interest.

I just need to pay the tax on interest of the RD amount.

Option 3 : Any other option you can suggest which will be more beneficial

Can you please suggest which option I should choose . Please explain me with the calculation to understand better.

I would really appreciate for your quick response. Thanks …

You have thought a lot about getting that EXTRA return and make investment less taxing. Here are my suggestions:

Option 1:Do FD at one go – You get Rs 82,432 in 1 year. After Tax return Rs 56,961Option 2:Keep money in savings account & do RD of 83,333 – You get Rs 44,141 in RD interest & Rs 27,500 in saving account interest. Taking Rs 10,000 as tax free on savings bank account interest, you should be left with Rs 52,594 after tax.So option 1 of doing complete FD at one go is still beneficial and simple.

YOu must look at Arbitrage Mutual Fund as you are in 30% tax bracket. The returns are similar to 1 year FD and gains are tax free after 1 year and taxed at 15.45% in sold before 1 year.

I am very happy but I have no money I don’t work so happy

Truth

P bank me money n lgay

SIR u have given us very useful information

Hi Amit Ji,

Your inputs are very appreciated,

I have 1 lack rupees in my hand and planning to save for my Nephew (9 years old) for 5 to 10 years (need to get some high/better returns). Which one is better, FD/Mutual. Please guide me.

Thanks in advance………. 🙂

If you are looking for NO risk guaranteed investment GO for fixed deposit.

Hi amit i would like to save 4 lakh for 1 year and generate income for this amount every month for the next 1 year. what do you think will be the best deposit to pick?

I think this should help you in picking the right investment plan – 13 Investments to Generate Regular Income

i want to ask u that i am NRI i have 50 lakh in hand…so which plan is best for me to get intrest monthly …garry singh

I had written about Investments to Generate Regular Income. Please check and choose investments best suited to your risk profile and needs. Let me know in case you have additional query.

Dear Amit,

I have read all the blogs of you, it’s really very good, Kindly please suggest me, I was saving in smaller amount’s from my salary, Now they are seven lacks currently. my plan is to save for an House in future might be after six/seven years. Can you please suggest me where to Invest them to get more returns at the end ? or Can I get monthly interest amount from that seven lack’s if I invest in anywhere? Please suggest me there is no one to guide me, Please reply me, Thank you.

If you are in 30% tax bracket you can go for debt oriented mutual funds. Alternatively you can invest in Company Fixed Deposits or buy NCD/Bonds of private companies when they are issued or from stock exchanges.

Thank you so much Amit, I really appreciate you and your answers they are very very good.

Thanks 🙂