The interest rates offered by banks on fixed deposits (FDs) depends on the tenure chosen and the amount. Even Post Office term deposits interest rates vary when it comes to the tenure.
India Post Term deposits (POTD)
India Post offers term deposits in four categories: 1 year, 2 year, 3 year, and 5 year. Deposits must be made in multiples of Rs 100 starting with a minimum of Rs 1000.
There is no upper limit on deposits. After six months, an account may be terminated. Simple interest at the POSA rate is due when deposits are prematurely taken from an account after six months but before one year. The Income Tax Act’s section 80-C allows for a deduction for deposits made into 5-year time deposits.
India post offers 5.5% on 2 year FD.
Bank deposits vary according to the tenure of the deposits, many big banks offer interest ranging from 2.5% to 7% for tenure between 7 days to 10 years. Here we have a quick look at banks offering the highest rates on 2 year bank FDs.
|Bank Name||2 Year|
|IDFC First Bank||6.50|
Big banks’ FD interest rates
Big banks including SBI, and HDFC Bank offer 5.5% interest rate on 2 year term deposits, while ICICI Bank offers 5.60% on 2 years tenure.
Penalty for Premature Withdrawal of Fixed Deposit
Banks charge a penalty when you withdraw your bank FD out early to make up for it. According to the terms and circumstances provided by the bank, the penalty normally relies on when you withdraw the FD during the allotted tenure. The penalty fees typically vary from 0.5 to 1% of the interest rate.