7.5% Interest On FDs Of Lakshmi Vilas Bank (DBS) Are Attractive

Lakshmi Vilas Bank, which ran into trouble has been amalgamated with DBS Bank India, the wholly owned subsidiary of DBS Group Holdings Ltd, Singapore. DBS is a leading financial services group in Asia with a presence in 18 markets. It has been recognised for its global leadership, and named "World's Best Bank" by Euromoney, "Global Bank of the Year" by The Banker and "Best Bank in the World" by Global Finance.

"All Lakshmi Vilas Bank employees will continue in service and are now employees of DBS Bank India Limited on the same terms and conditions of service as under Lakshmi Vilas Bank," DBS Bank India said.

Attractive interest rates on fixed deposits by Lakshmi Vilas Bank (DBS Bank India)

Interestingly, the fixed deposits of Lakshmi Vilas Bank continue to offer very good interest rates. After the amalgamation the bank also remain strong, which means the deposits are also safe. Take a look at the interest rates offered by Lakshmi Vilas Bank or DBS Bank, whichever you may like to call it.

Tenure	Interest rates	Interest rates (senior citizens)
365-days	6%	6.5%
366-days	7%	7.5%
367-days to less than 3-years	6%	6.5%
3-years to less than 5 years	6%	6.5%
5-years to 10-years	6%	6.5%

The interest rates are significantly higher than the big banks like ICICI Bank, State Bank of India, HDFC Bank or PNB. In fact, they are a good 2 to 3 per cent higher than some of these banks. In terms of safety too it is advisable to look at the bank fd, given the fact that it has now been taken over by DBS Bank India. Also, deposits up to a sum of Rs 5 lakhs is insured through the Deposit Insurance and Credit Guarantee Corporation of India.

If you are looking to invest, it would be advisable to invest for a shorter term maturity, given that interest rates could go higher in the long term.

The way inflation in the Indian economy is panning out, it is only a matter of time, before interest rates start heading higher. Therefore, we would not advise investors to go beyond the tenure of 1 to 2 years. In fact, if interest rates trend higher and you break your fixed deposits to invest at higher rates, there is a charge of 1 per cent for breaking your FD before maturity. Therefore, one should invest in shorter term duration for the fixed deposits.

About the author:

Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. Sunil's areas of interest include commodities, equities, mutual funds, tax planning and debt instruments.