Fixed Deposits are trusted for safety, liquidity, and returns. You can easily earn higher interest by choosing specific FD schemes designed by banks for particular customer segments.
FD calculators play a significant role in calculating and comparing FD interest rates between banks and financial institutions. They make seemingly difficult calculations within seconds, helping you with insights and the power to make informed decisions.
However, don’t just go for the highest rates without thinking it through. Each special FD needs evaluation based on factors like liquidity, balance, accessibility, etc., suited to your risk profile before investing.
Let’s explore targeted Fixed Deposit options that provide attractive, incentivised returns.
Types of Special FDs with High-Interest Rates
Banks offer a variety of special FD schemes with enhanced FD interest rates to cater to specific customer needs.
Let’s look at some popular options:
These FDs offer tax benefits under Section 80C up to Rs 1.5 lakhs. The interest rates on these are slightly higher than regular FDs. However, they typically have a lock-in of 5 years.
These provide higher FD interest rates, up to 8.50% (in top private banks) or even 9.50% (in small finance banks) for investors above 60. Senior citizens also enjoy higher tax benefits.
Bulk deposits require a minimum balance of Rs 2 Crore or more. They are targeted at high-net-worth individuals and businesses. The interest rates offered for such large deposits are usually higher owing to the large ticket size.
For tech-savvy investors, paperless online FDs offer higher returns. Ensure you use an FD calculator to estimate returns before opting for this option.
These FDs allow premature withdrawals and offer lower rates due to the added liquidity, hence beneficial for short-term parking of surplus funds.
Funds are automatically transferred from savings accounts to linked FDs at maturity. Interest rates are similar to regular FDs.
Research properly and choose the variant that best satisfies your investment needs and risk appetite.
How to Evaluate Special FD Schemes?
With so many options, how do you assess which special FD works best for you? Here are some parameters to consider:
Compare FD interest rates offered on specific special Fixed Deposits by leading banks. Rates vary across banks. So, shortlist the ones offering the highest returns in that category.
Analyse the premature withdrawal policy, especially for tax-saver FDs. Check if partial or full early withdrawals are allowed and if there are any associated penalties.
Special FDs may require a higher minimum deposit amount than regular FDs. For instance, as mentioned above, bulk FDs may need a Rs 2 Crore minimum balance. Therefore, you must evaluate if you can invest the required amount.
Some banks offer complimentary insurance coverage, locker facilities, etc., on certain special FDs. Assess if such additional benefits are being offered under the specific FD scheme you are considering.
Online FDs require digital access and comfort with a paperless investment process. However, seniors who value relationship managers and in-person support may prefer offline FDs.
Do your due diligence across these aspects before parking hard-earned money. Use an FD calculator to estimate returns on the shortlisted options.
Top FD Schemes with Attractive Interest Rates
Some of India’s premier banks and financial institutions have introduced exclusive Fixed Deposit schemes. These specialised offerings feature enticing interest rates and unique attributes, ensuring competitive returns.
Here are some examples:
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ICICI Bank Golden Year FD
ICICI Bank presents the Golden Year FD, offering senior citizens an additional interest rate of 10 bps (basis points, where 1 basis point = 0.1%) on top of 50 bps. This exclusive benefit is applicable for tenures spanning from 5 years and 1 day to 10 years. Senior citizens investing in this scheme can enjoy an interest rate of 6.55%, ensuring a golden opportunity for enhanced returns.
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SBI WeCare FD Scheme
State Bank of India (SBI) has launched the “SBI WeCare” Deposit scheme exclusively for senior citizens. With an additional premium of 50 bps on top of the standard 50 bps for regular FD rates, applicable to tenures of ‘5 years and above,’ this scheme is open for application until September 30, 2023. Offering an attractive interest rate of 7.50%, SBI WeCare ensures competitive returns for senior citizens.
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IDBI Special FD Scheme
Alongside major banks, IDBI Bank introduces the “IDBI’s Amrit Mahotsav FD,” a limited-period special Fixed Deposit scheme. With two variants—a 375-day tenure offering 7.10% interest and a 444-day tenure offering 7.60% interest—this scheme is valid till August 15, 2023.
IDBI’s initiative provides an additional avenue for investors to benefit from attractive interest rates.
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HDFC Senior Citizen Care FD
HDFC Bank extends a premium of 25 bps beyond the standard 50 bps to senior citizen FD depositors for tenures ranging from 5 years to 10 years. This results in an impressive interest rate of 7.75%, tailored for senior citizens. The scheme is valid until November 7, 2023, providing an excellent opportunity for senior citizens to secure their investments.
Final Words
Banks present an array of customised schemes with elevated FD interest rates designed to cater to specific financial needs. However, when choosing an FD scheme, it’s essential to evaluate factors such as liquidity, minimum balance requirements, and the quality of customer service, aligning your selection with your investment objectives, time horizon, and risk tolerance.
Special FD schemes are structured to enhance returns through incentives but come with unique terms and conditions. Therefore, conducting comprehensive research or seeking advice from financial experts to identify the most suitable scheme is advisable. With knowledge and financial discipline, you can pinpoint special FDs that balance safety, returns, and liquidity.
The highest interest rate might not always be the best choice for everyone. It’s crucial to consider your financial situation, future financial goals, and the flexibility of the FD scheme you opt for. By remaining well-informed and exercising prudence in your approach, you can leverage the advantages of these tailored FD schemes and effectively grow your savings. To assist in your decision-making process, consider utilising an FD calculator.