InvestorQ : Why are bank FDs suddenly back in demand among Indian investors?
swati Bakhda made post

Why are bank FDs suddenly back in demand among Indian investors?

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Sam Eswaran answered.
1 month ago
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Even as markets remain jittery about the RBI hiking rates by 190 basis points between May and September, it has had one obvious outcome. FDs have once again become attractive, despite concerns over their tax inefficiency. It is not only matching inflation but also doing better than inflation, so investors are happy. Also, it is not uncertain and volatile like equities or mutual funds. The trigger came from a slew of private banks raising rates on FDs by 100-125 basis points in the last couple of months. This has certainly added to the pool of options wherein investors can put their hard earned money.

Here is a quick summary of key FD rates of some leading private sector banks. From October onwards, ICICI Bank is offering rates ranging between 3.00% to 6.10% based on tenure. Senior citizens can get up to 50 bps higher. Even Kotak bank is offering FD rates ranging from 2.50% to 6.20% while senior citizens get up to 80 bps higher. Smaller banks are more salivating. For instance, DCB Bank offers FD rates between 4.80% to 7.10% with 50 bps higher for senior citizens. Even RBL Bank is offering FD rates between 3.25% and 7.25% on general FDs. Investors have a choice and they just need to use their discretion.

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