Facts about bank FD interest rates

Bank FD interest rates are the interest rates that are being paid to the depositor by a bank for the principal amount invested in the fixed deposit. Normally, bank FD interest rates are less than the interest rates paid by the private financial institutions on fixed deposits. However, you have a great security for your sum deposited in fixed deposit scheme of the banks rather than depositing in private financial institutions. This is for the reason that if the banks go insolvent, they will return your deposited amount with accrued interest, whereas, this is not possible in case of private financial institutions. Also, the amount invested in the banks’ fixed deposit fetches you a tax deduction under the section 80G.

Summary: Though the bank FD interest rates are less than the interest rates offered by the private financial institutions, it is safe to deposit your hard-earned money in bank fixed deposit.