Rising fixed deposit interest rates: Is now the time to secure your savings?

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In its March 2024 FOMC meeting, the US Federal Reserve indicated that it would cut interest rates in the second half of 2024. Following the US Fed, the RBI is also expected to cut interest rates in the second half of 2024. Once that happens, the banks in India may also cut interest rates on fixed deposits.

However, in March 2024, some banks increased their fixed deposit rates. In the case of most banks, the current fixed deposit interest rates being offered are at a decadal high. So, are these the best interest rates on fixed deposits? And should you lock into these high fixed deposit rates? Let us discuss.

Also Read: Fixed deposit news: Bank of India revises FD rates. How they compare with SBI, ICICI, HDFC Bank

Let us compare the current fixed deposit interest rates that are being offered by some private, public, and small finance banks (SFBs).

Let us look at the interest rates being offered on various FD tenures by some big private sector banks.

(Source: Websites of respective banks, as of 1st April 2024)

The above table shows that among big private banks, IndusInd Bank is offering one of the best FD interest rates of 7.75% p.a. for a tenure of 1 year 7 months to 2 years.

Also Read: These banks offer higher FD interest rate above 7 percent. Details here

Let us look at the interest rates being offered on various FD tenures by some big public sector banks.

(Source: Websites of respective banks, as of 1st April 2024)

The above table shows that among big public sector banks, 4 banks are paying the same interest rate of 7.25% p.a. However, the Bank of Baroda is offering the 7.25% p.a. rate for the highest tenure of above 2 years and up to 3 years.

If we compare the FD interest rates of big private banks and PSU banks,