Banks, Including ICICI and HDFC, Offer Up to 7.25% FD Interest Rates – Find the Best Option

ICICI, Bank of Baroda (BoB), HDFC, and Bank of India (BoI) have recently increased interest rates on fixed deposits (FDs). You can now earn up to 7.25% interest on FDs in these banks. If you’re considering opening an FD in these or other banks, it’s essential to know about their interest rates.

Choosing the Right Timing is Crucial

It’s crucial to think about the timing before investing in FDs. This is because if investors withdraw their deposits before the maturity period, they might have to pay a penalty. If you prematurely withdraw an FD that has matured, you could be subject to a penalty of up to 1%. This could lead to a reduction in the overall interest you receive on your deposit.

Don’t Put All Your Money in One FD

If you’re considering placing a 10 lakh rupees FD in any bank, consider dividing it into multiple FDs of 8 lakhs and 4 lakhs in different banks. This can help you better manage your funds and meet your financial requirements. Your other FDs will remain secure.

Benefits of Interest Income

Previously, banks offered quarterly and annual interest payment options. Now, some banks provide the flexibility of monthly interest payments. You can choose the payment frequency based on your preference.

Enjoy Tax Benefits on 5-Year Deposits

If you decide to invest in a Time Deposit scheme or an FD for 5 years, you can avail tax benefits under section 80C of the Income Tax Act, 1961. This allows you to claim a tax deduction of up to 1.5 lakh rupees on the deposit, potentially reducing your overall tax liability.