Scroll Top

search-icon
    drop-arrow

    Deposit Interest Rate

    Introduction

    The deposit interest rate is paid by a bank or financial institutions to account holders who have deposited with them. Deposit accounts include fixed deposit (FD), recurring deposits (RD), savings accounts, and current accounts.

    The deposit accounts are attractive places to park cash for depositors who want a safe place for keeping their investment and earn a small amount of fixed interest.

    Understanding Deposit Interest Rates

    Generally, financial institutions provide better rates for larger-balance account holdings. It is seen as an opportunity to draw value-added clients with substantial assets. By attaining a higher interest rate and a higher amount invested, the greater is the return over time.

    Though this may still be seen as a slower return-generating approach to capital growth, such accounts can offer greater stability compared to other more volatile, high-risk financial products.

    The fixed interest rates offered for some savings accounts appear to be lower compared to other financial products with more flexible returns. The tradeoff is that the account holder is assured of steady deposit growth versus the potential for unexpected earnings, or even higher-scale losses. For example, when the account reaches maturity, the deposit with a fixed rate is guaranteed to provide the specified return.

    Interest Rates & Deposit Periods

    Banks, credit unions, and other financial institutions prefer to deliver favourable interest rates on these deposits to draw consumers more effectively. Depending on the product, interest rates for premium deposits will only be available under certain conditions, such as minimum balances and likely maximums.

    Some accounts also require a fixed length of time, such as six months, one year, or multiple years over which the money must remain deposited, and the account holder can not access it. If the deposit is withdrawn early, penalties and fees may be incurred, including the possible loss of the interest rate decided upon if the amount remaining in the account falls below the minimum.

    The financial institutions not only promote long-term deposits to support the customer from the increased interest that is received, but also because it gives the institution more liquidity. The banks or institutions can make more lending transactions with its customers, such as loans and credit cards, by having more cash through deposits.

    Index

    Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

    Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

    CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

    Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

    Cleartax is a product by Defmacro Software Pvt. Ltd.

    Company PolicyTerms of use

    ISO

    ISO 27001

    Data Center

    SSL

    SSL Certified Site

    128-bit encryption