Which bank offers Highest Bank FD Interest Rates for February 2018? Let us shortlist the bank based on current interest rate.
Features of Bank FDs (Fixed Deposits)
- You can book the FD from minimum 7 days to 10 Years.
- However, few banks like Ratnakar Bank and IDBI Bank Offers FDs up to 20 years.
- Interest on such FDs is quarterly compounding (if your FD is at least more than 6 months). Hence, let us say the Bank FD rate is 8% for 10 Years FD, then the effective rate will be 8.24%.
- You can request for interest payout based on your requirement like monthly or on a quarterly basis also.
- Banks offer the loan or Over Draft (OD) facility on your FD. The interest on such loan or OD will be around 0.5% to 1% more than your FD rate.
- Such FDs attract TDS (Tax deduction at source) at the rate of 10%, if the interest income is more than Rs.10,000 in a financial year per bank.
- There is a misconception among many of us that avoiding TDS means avoiding income tax. However, even if you avoid TDS, the income from Bank FD will be taxable income for you and you have to pay the tax as per your income tax slab.
- Check for penalty clause on premature closure.
- Never forget to use the nomination facility.
- There are options like re-investment at maturity or credit back to your bank account. Hence, choose the option wisely based on your requirement. You can re-invest either only principal or only interest.
For your ease of understanding, I am dividing the Bank FD rates as below.
# FD rates for less than a year.
#FD rates for 1-2 years.
# FD rates for 2-5 years.
# FD rates for 5-10 years.
#FD rates for more than 10 years.
Highest Bank FD Interest Rates – February 2018
Now let us see which bank offers the Highest Bank FD Interest Rates for the month of February 2018.
In this below table, I listed all major banks. Also, my priority is to list the FD rates which can be available for premature.
You noticed that for less than a year FDs, the interest rate varies from 5% (United Bank of India) to 7% (RBL Bank). Same way, for 1 Yr to 2 Yrs FDs, the interest rate varies from 6.25% (HDFC Bank) t0 7.1% (RBL Bank). For 2 Yrs to 3 Yrs FDs, the interest rate varies from 6% (SBI) to 7.1% (RBL Bank). For 3 Yrs to 5 Yrs FDS, the interest rate varies from 6% (HDFC Bank and Bank Of Maharashtra) to 7.25% (DCB Bank). For more than 5 Yrs FDs, the interest rate varies from 6% (Canara Bank) to 7.1% (RBL Bank).
In my view, open the FD where you have internet banking facility. This is completely hassle-free and even you can liquidate the FD at any point of time (by paying premature closure penalty) using the same internet banking facility.
Otherwise, if you book the FD physically visiting the Bank, then some banks do not allow you to liquidate the FD using internet banking.
Hence, cross-check the rules before jumping into opening FD.