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May 06 16

Understand about Fixed Deposit Interest Rate

Fixed deposits in different financial institutions will always have different/varying rates in terms of fixed deposits. This is due to several reasons:

  • The source of funds are different for every financial institution
  • The cost of sourcing this capital is also different for financial institutions
  • Larger financial institutions usually take the risk with the depositors
  • Some financial institutions often pay more to acquire funds and hence pay out higher interest rates as compared to their larger (and mostly public sector) counterparts
  • Market conditions and the business models of various financial institutions influence their fixed deposit rates

When it comes to choosing a fixed deposit investment for your needs, be sure to compare the rates offered by different financial institutions and go for the one that earns you ample interest income. Bajaj Finance, for example, offers between 8.05-8.30%  interest rate on fixed deposit investments

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