Before you open a fixed deposit (FD) in a bank, it is natural to compare the term deposit interest rate with those of others. Most banks offer anywhere between 3 and 7 per cent per annum on their fixed deposits based on their tenure.
The rule of thumb is this: the longer the tenure, the higher the interest rate. So, when you want to maximise your earnings, you need to stay invested in a bank FD for a long duration.
Have you ever wondered how long it takes to double the investment by investing in a fixed deposit?
Typically, it takes an ‘x’ number of years to double the investment where ‘x’ = 72/rate of interest. This means when the interest rate is 7 per cent per annum, it will take 10.28 years to double the money. And when the FD interest rate is 7.2 per cent per annum, it will take exactly 10 years to double the money.
Let us find out how can depositors double their money by investing in fixed deposits.
HDFC Bank: HDFC Bank offers 7 per cent interest on fixed deposits for 10 years to general citizens and 7.5 per cent to senior citizens. If you remain invested for 10 years, the amount deposited will grow almost double. For example, if you invest ₹100, it would grow to ₹196.72 in 10 years, and in the case of senior citizens, it would swell to ₹206 i.e., more than double.
ICICI Bank: This private lender offers 6.9 per cent as interest rate on fixed deposits for 10 years and 7.4 per cent to senior citizens. This means if someone invests ₹100, it would grow to ₹194.88 in 10 years and if that depositor is a senior citizen, the investment would grow to ₹204.
State Bank of India (SBI): The largest state lender offers 6.5 per cent to general citizens on fixed deposits for 10 years and 7.5 per cent to senior citizens. This means if someone invests ₹100 in an SBI FD, it would grow to ₹187.71 in 10 years. In the case of senior citizens, this would grow to ₹206 (see table below).
| Bank | General | Senior Citizens |
| HDFC Bank | 196.72 | 206 |
| ICICI Bank | 194.88 | 204 |
| SBI | 187.71 | 206 |
| Kotak Mahindra Bank | 182 | 191 |
| Bank of Baroda | 187.71 | 206 |
| Punjab National Bank | 187.71 | 202 |
(Source: Bank websites)
Kotak Mahindra Bank: This private lender offers 6.2 per cent to general citizens and 6.7 per cent to senior citizens on fixed deposits for 10 years. This means if someone invests ₹100 in a fixed deposit, it would grow to ₹182 in 10 years in the case of the general public and ₹191 for a senior citizen.
Bank of Baroda: This state lender offers 6.5 per cent on 10-year fixed deposits to the general public and 7.5 per cent to senior citizens. This implies that if someone invests ₹100 in a fixed deposit, the sum would grow to ₹187.71 in 10 years, and in the case of senior citizens, the sum would grow to more than double i.e. becomes ₹206.
Punjab National Bank: The second largest state lender offers 6.50 per cent as interest rate on fixed deposits for 10 years to the general public and 7.30 per cent to senior citizens. This means if someone invests ₹100 in a fixed deposit with PNB, the sum would grow to ₹187.71 in 10 years and ₹202 in the case of senior citizens.
