4 Deposits That Offer Higher Interest Rates Than Bank Fixed Deposit

Sunil Fernandes
·3-min read

It is a huge struggle to get returns from bank deposits these days. In fact, the larger private banks and the government owned banks like State Bank of India offer a maximum interest rate of 5.5 per cent on their regular deposits. This is not very much and hence investors looking for returns are finding the going very hard, especially those who are retired and depend on interest income.

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Maximum interest rate on regular deposits









Here are 4 deposits that give you very good returns when compared to banks

IDFC First Savings Bank Account

To begin with IDFC First Bank is a well capitalized bank and the deposits are rated AAA. A balance in the savings account which is more than Rs 1 lakh, attracts an interest rate of 7 per cent. This is not bad at all and is a good 1.5 per cent more than what fixed deposits of leading banks in the country offer. Interestingly, if there is an emergency you can withdraw anytime from your savings account, however, in the case of FDs, it attracts a charge of 1 per cent.

This makes the savings bank account of IDFC First Bank extremely attractive. Apart from this there are other benefits like cashback on movie tickets and a lifetime free debit card. The yields can go higher than 7 per cent, given that savings account interest is compounded every quarter.

Bajaj Finance Fds

Bajaj Finance too offers an interest rate near the 7 per cent mark. If you opt for a tenure ranging from 36 to 60 months, you get an interest rate of 7.10 per cent. This is a AAA rated fixed deposit, and the company is a part of the Bajaj group.

The minimum deposit required is Rs 25,000. One can also opt for a monthly payout of the interest rate, in which case the interest offered is 6.88 per cent on a 36 to 60 month deposit. For a quarterly payout the interest rate is 6.91 per cent. We suggest investors to stay away from long tenure of deposits, as interest rates could even rise in the next one year or so.

Mahindra Finance Online Fds

The Dhanvruddhi Cumulative and Non-Cumulative Scheme - Fixed Deposit Interest Rates are perhaps the best in its class. Investors opting for the online mechanism through the Mahindra Finance website, can receive a very high yield of near 8 per cent on a 40 month deposit.

The interest rate offered in the cumulative scheme is 7.05 per cent for 27 months, 7.20 for 33 months and 7.30 for a forty months tenure. The deposits are rated AAA and being a part of the Mahindra group are secure. Investors looking for a short term investment of 27 to 33 months, this investment is good.

It's important to remember that there would be a TDS on the deposits, if the interest income crosses Rs 5,000.

Yes Bank Fds

While Yes Bank did run into problems, the bank is now majority owned by State Bank of India. The bank is gradually getting back to its feet.

Yes Bank offers an interest rate of 7 per cent on its 2-3 year deposit. In case of banks, there is a Tds applicable if the interest income crosses the Rs 10,000 mark.

Also Read:

This Government Bank Offers Gold Loans At Just 7% Interest Per Annum

10 Banks That Offer Highest Rate On 1-Year FD

3 Banks That Give You the Highest Interest Rates On Fds