This Singapore Bank's India Subsidiary Offers 8% Interest On Fixed Deposits

It's been a good last few quarters for those who are looking to invest in fixed deposits. Most banks have raised interest rates and going ahead we see the possibility of at least a further 25 basis hike in fixed deposit interest rates by most banks in the country. DBS Bank India, the subsidiary of one of Singapore's largest bank's, DBS has also hiked deposit interest rates. Let's take a look.

Fixed deposit interest rates of DBS Bank across various tenures

Tenure	Regular Deposits	Senior citizens
7-days	2.50%	2.50%
600-days	7.25%	7.75%
2 years & 6 months	7.25%	7.75%
2 years 6 months 1 day & less than 3 years	7.50%	8.0%
3 years and less than 4 years	6.50%	7.0%
4 years to less than 5 years	6.50%	7.0%
5 years and above	6.50%	7.0%

Now if we see the best interest rates on fixed deposits at DBS Bank comes with a tenure of 2 years 6 months 1 day & less than 3 years which offers senior citizens an interest rate of 8% and regular depositors an interest rate of 7.50%. The problem here is that the tenure is slightly short in the sense that let's assume you invested for this period of 2 years 6 months 1 day & less than 3 years and before expiry of the deposits the interest rates have fallen, when you want to reinvest you would have to re invest at lower interest rates. So, the best way to go about investing would be to look for longer tenors. The problem with banks right now is that they are offering lower interest rates on Fixed deposits of longer tenors.

Would interest rates on fixed deposits move higher?

There is a probability that interest rates on deposits would move even higher in the next 1-year or so. At least the smaller finance banks are going to continue to raise interest rates. Nevertheless, it is good to lock money at higher interest rates for a longer term tenure. For the DBS Bank deposits one the 4 to 5 years time frame would have been ideal, but., as we see the interest rates are much lower and on this tenure HDFC Bank offers a much better interest rate. It's important to also remember that in case you are not liable to TDS, it is better to submit the form 15g and 15h.