Looking for a safer place to keep your money instead of taking stock market risks? A bank fixed deposit (FD) could be worth considering.
Canara Bank is offering 6.60% annual interest to regular customers on a 555-day FD. The annualised yield is 6.77%.
For senior citizens, the rate is even higher. They can earn 7.10% interest, with an annualised yield of 7.29%.
This makes the FD an option for people who want to lock in their money for around one and a half years and earn a fixed return.
How Much Can You Earn on a 555-Day FD?
The 555-day FD runs for a little over 18 months.
For regular customers, the interest rate is 6.60% per year, while senior citizens get 7.10% per year.
For example, if you invest ₹1 lakh:
Regular customers can earn around ₹6,600 in annual interest at 6.60%.
The annualised yield works out to around ₹6,770.
Senior citizens can earn around ₹7,100 in annual interest at 7.10%.
Their annualised yield is around ₹7,290.
The actual amount you receive will depend on your deposit amount and the interest payout option you choose.
Senior citizens get an advantage because of the additional interest rate offered by the bank.
What If You Want to Deposit More Than ₹1 Crore?
Canara Bank also offers a non-callable FD for customers depositing more than ₹1 crore.
Under this option, regular customers can get 6.70% annual interest, with an annualised yield of 6.87%.
Senior citizens can get 7.20% annual interest, with an annualised yield of 7.40%.
So, customers making very large deposits may get a slightly higher return through the non-callable FD.
Callable vs Non-Callable FD: What’s the Difference?
Before opening an FD, it is important to understand whether it is callable or non-callable.
A callable FD generally allows you to withdraw your money before maturity, subject to the bank’s rules. However, you may lose some interest or have to pay a penalty for early withdrawal.
A non-callable FD, on the other hand, generally does not allow premature withdrawal.
Because of this restriction, non-callable FDs may offer a slightly higher interest rate.
If there is a chance you will need your money before the FD matures, check the withdrawal rules carefully before investing.
Things to Check Before Investing
An FD can provide predictable returns, but it is still important to choose the right tenure for your financial needs.
If you think you may need the money within 555 days, locking it into an FD with withdrawal restrictions may not be suitable.
Also remember that FD interest can be taxable, and the bank may deduct TDS in applicable cases.
Before investing, check the latest interest rates, terms and tax implications.
For someone looking to keep money relatively safe for around 18 months, Canara Bank’s 555-day FD could be one option to consider.
