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All You Need to Know about FD Rates of SBI, IDFC First Bank and Post Office

A man checks his mobile phone in front of State Bank of India (SBI) branch in Kolkata. (File photo/Reuters)

A man checks his mobile phone in front of State Bank of India (SBI) branch in Kolkata. (File photo/Reuters)

Top banks like the State Bank of India (SBI), HDFC Bank, ICICI Bank and IDFC First Bank offer short-term as well as long-term deposits to account holders. Post office, too, offers time deposits which see a quarterly revision of interest rates similar to banks.

Fixed Deposit (FD), in general, is the first step towards building a corpus where your hard earned money is locked-in for a certain period and earns reasonable returns. It is always advised to keep a good chunk as liquid funds in the form of cash deposits or fixed deposits as that gives a sense of financial security.

Earlier, fixed deposits had a lock-in period of 5 years but can now be adjusted to a lesser time period depending on your choice. Top banks like the State Bank of India (SBI), HDFC Bank, ICICI Bank and IDFC First Bank offer short-term as well as long-term deposits to account holders. Post office, too, offers time deposits which see a quarterly revision of interest rates similar to banks.

The interest rates of the FDs were last revised on April 1 amid the coronavirus pandemic.

SBI offers a flexible time period varying from minimum 7 days to 10 years catering to customers’ short-term and long-term investment requirements. SBI FD interest rates are effective from January 8 and varies from 2.9 percent to 5.4 percent for general customers.

A premature withdrawal or early closure of FD attracts penalty. SBI charges 0.50 percent as penalty across all tenures of investments up to Rs 5 lakh. If a FD is withdrawn within 7 days, then the bank does not pay any interest.

Post office term deposit schemes are similar to bank FDs and range from one year to five years. Post office term deposit schemes are effective from April 1, 2020. Post office term deposit offers an interest rate of 5.5 percent for a one-year time deposit to three years. Term deposit of five-year duration earns an interest rate of 6.7 percent.

Similarly, IDFC First Bank offers short-term FDs ranging from 7 days to one year and the duration of long-term FDs ranges from one year to 10 years. The interest rates at IDFC First Bank are effective from September 15, 2020. The bank offers an interest rate of 2.75 per annum to 5.75 percent per annum for deposits with a tenure of 7 days to 10 years.