- Revised FD Rates: Banks like Punjab & Sind, Bank of Maharashtra, and YES Bank offer revised FD interest rates for November 2024.
- Special Rates for Senior Citizens: Senior citizens can get up to 8.15% per annum, especially for long-tenure deposits.
- Potential RBI Rate Cuts: The RBI is expected to lower interest rates, so locking in higher FD rates now is beneficial.
- Taxation on FD Interest: FD interest is taxable based on income tax slabs, with TDS deductions applicable for interest exceeding Rs 40,000 (Rs 50,000 for senior citizens).
- Super Senior Citizens: Extra benefits like 0.15% higher interest rates are offered to individuals aged 80 and above.
In recent announcements, three major Indian banks—Punjab & Sind Bank, Bank of Maharashtra, and YES Bank—have revised their Fixed Deposit (FD) interest rates. Effective November 2024, these updates offer new opportunities for investors, including regular citizens, senior citizens, and super senior citizens.
Additionally, potential interest rate cuts by the Reserve Bank of India (RBI) could affect FD returns in the coming months, making it a critical time for investors to consider locking in higher rates.
Updated Fixed Deposit Interest Rates by Bank
1. Punjab & Sind Bank (Effective from November 14, 2024)
Punjab & Sind Bank has introduced new fixed deposit rates, providing a range of interest rates based on the type of deposit (callable vs. non-callable), tenure, and category of the investor (general, senior citizens, or super senior citizens).
| Deposit Type | Interest Rate | Senior Citizens | Super Senior Citizens (80+ years) |
|---|---|---|---|
| Callable Deposits | 4.00% to 7.45% per annum | 4.50% to 7.95% per annum | 8.10% for 555-day FD |
| Non-Callable Deposits | 4.25% to 7.50% per annum | 4.75% to 8.00% per annum | 8.15% for 555-day FD |
| Highest Rates | 7.50% for 555-day non-callable FD | 8.00% for 555-day non-callable FD | 8.15% for 555-day non-callable FD |
Note: Super senior citizens (aged 80 and above) receive an extra 0.15% on non-callable deposits, making it an excellent opportunity for those in this age group to invest in FDs.
2. Bank of Maharashtra (Effective from November 14, 2024)
The Bank of Maharashtra has also revised its FD interest rates, offering a range of returns depending on the tenure of the deposit.
| Deposit Type | Interest Rate | Senior Citizens |
|---|---|---|
| Regular FD Rates | 2.75% to 7.35% per annum | 2.75% to 7.85% per annum |
| Special FD Schemes | – 6.90% for 200 days- 7.35% for 333 days-7.10% for 400-day tenure- 7.75% for 777 days | – 7.40% for 200 days- 7.85% for 333 days-7.60% for 400-day tenure- 7.75% for 777 days |
3. YES Bank (Effective from November 5, 2024)
YES Bank has reduced its FD interest rates slightly for certain tenures, particularly for deposits less than Rs 3 crore.
| Deposit Type | Interest Rate | Senior Citizens |
|---|---|---|
| Regular FD Rates | 3.25% to 7.75% per annum | 3.75% to 8.25% per annum |
| Highest Rate | 7.75% for 18-month FD | 8.25% for 18-month FD |
Note: YES Bank has reduced the interest rate by 0.25% for the 18-month FD tenure, offering 7.75% per annum now, compared to the previous 8%.
Implications of RBI’s Interest Rate Outlook
Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal have recently urged the RBI to consider cutting interest rates to support economic growth.
Although the RBI’s current policy rate stands at 6.5%, economists anticipate a potential 25-basis-point cut by December 2024. If rates decrease, FD returns might also drop, making now an ideal time for investors to lock in competitive rates.
What Do These Changes Mean for You?
- For Regular Citizens: The updated FD rates present a chance to earn better returns on investments, particularly for those willing to lock their money in longer-tenure deposits.
- For Senior Citizens: Senior citizens can benefit from higher rates, especially on longer tenures. Some banks, like Punjab & Sind, offer an additional 0.50% interest for deposits of 180 days or more.
- For Super Senior Citizens: With the additional 0.15% offered by Punjab & Sind Bank for those aged 80 and above, super senior citizens can enjoy some of the best returns in the market.
Why You Should Consider Locking in FD Rates Now?
- Maximize Returns: With the possibility of future rate cuts, locking in current high rates ensures higher returns.
- Secure Your Savings: By locking in FD rates today, you can protect your savings from any future interest rate reductions.
- Attractive Long-Term Gains: Extended tenures like 555 days or 777 days offer some of the best FD returns, especially for senior citizens and super senior citizens.
How is FD Interest Taxed in India?
FD interest is taxable based on the individual’s income tax slab.
| Criteria | Details |
|---|---|
| Taxable Amount | Interest earned is added to total income and taxed as per the applicable income tax slab. |
| TDS Deduction Threshold | – Rs 50,000 for senior citizens- Rs 40,000 for others |
| TDS Rates | 10% if PAN is provided; 20% if PAN is not submitted. |
Example:
Let’s consider an example with a different individual:
Arun, aged 45, earns Rs 60,000 annually from FDs.
- TDS Deducted: Rs 6,000 (10% of Rs 60,000)
- Taxable Income: If John’s total income is below Rs 2.5 lakh, no further tax is payable.
- To avoid TDS: John can submit Form 15G at the beginning of the financial year, declaring that his total income is below the taxable limit, which will prevent the bank from deducting TDS.
In this case, if John earns less than the taxable threshold, submitting Form 15G would help him avoid the upfront TDS deduction.
