Flexicap41 min ago
Investments With Higher Rates Than PSU Bank FDs: As fixed deposit rates decline, 7 schemes that offer higher returns than most bank FDs
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
Investments Offering Higher Rates Than PSU Bank FDs: After the Reserve Bank of India (RBI) cut the repo rate for the second time in a row, many leading banks in India followed the path, cutting rates of their short- and long-term FDs. As a result, many fixed deposits are now offering lower amounts on maturity to their investors compared to what they had been offering around 3 months ago. E.g., State Bank of India used to offer a 7.25 per cent interest rate on its Amrit Vrishti 444-day scheme till March 31, 2025. It has reduced the rate to 6.60 per cent. The same bank's interest rate for the 5-year senior citizen FD was 7.50 per cent till March 31; the current rate is 7.05 per cent (source: official SBI website). Amid such a scenario, when FD rates are declining, there are many schemes, including guaranteed return, that are offering higher rates compared to FDs of many PSU banks. Here are a few schemes that are offering higher interest rates of return.
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(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
1/10
Post Office FD (National Savings Time Deposit Account)
1/10Even as banks are reducing FD rates, post office has maintained interest rates of its FDs of different tenures. It is offering the lowest at 6.9 per cent in its 1-year FD and the highest at 7.5 per cent in its 5-year FD. Here are the post office FD rates.
2/10
Post Office FD (National Savings Time Deposit Account)
2/10
Period
Rate %
1 years
6.9
2 years
7
3 years
7.1
5 years
7.5
3/10
Debt mutual funds
3/10Debt mutual funds have most of their investments in fixed interest income. The debt fund investment duration can be from 7 days to many years. Though past returns can't be future returns, many short-, medium- to long-, and long-duration debt funds have given over 7 per cent annualised return in the 5-year time frame.
4/10
Sovereign and corporate bonds
4/10Government of India, state governments, and private sector companies issue bonds that offer a fixed coupon rate to their investors on a one-time investment. Bonds' payment strength is measured on the basis of their ratings, with AAA being the top rating.
5/10
Sovereign and corporate bonds
5/10As the RBI cuts the repo rate, bond interest rates rise. Many government and private sector bonds have been giving over an 8 per cent coupon rate (interest rate) to their investors.
6/10
Senior Citizens Savings Scheme Account (SCSS)
6/10The post office is specifically designed for senior citizens, where, with a one-time investment of up to Rs 30 lakh, they can draw a quarterly income for 5 years.
7/10
Senior Citizens Savings Scheme Account (SCSS)
7/10The current interest rate for the scheme is 8.2 per cent, the joint-highest with Sukanya Samriddhi Account (SSA) among all post office schemes.
8/10
National Savings Certificates (VIIIth Issue) (NSC)
8/10NSC is also a long-term investment scheme with a maturity period of 5 years. The scheme offers a 7.7 per cent interest rate compounded annually to its investors. They can open an account with a minimum of Rs 1,000. There is no limit for maximum investment.
9/10
Public Provident Fund Account
9/10Designed specifically for retirement, the post office scheme offers a 7.1 per cent interest rate compounded yearly. The scheme comes with a 15-year maturity period where an investor can extend their account on maturity. The minimum investment is Rs 500, while the maximum is Rs 1,50,000 in a financial year.
10/10
Sukanya Samriddhi Account (SSA)
10/10The post office scheme focuses on girl child empowerment, offering an 8.2 per cent interest rate compounded yearly. One can open an account with Rs 250, while the maximum investment in a financial year is Rs 1,50,000. The maturity period is 15 years, and the account holder can close the account 21 years from the date of opening the account.
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