Bank Fixed Deposit Interest Rates

The interest rates you've listed seem to be from a fixed deposit scheme offered by a bank, typically referred to as a Fixed Deposit (FD) or Term Deposit. This type of scheme allows depositors to earn interest on a lump sum of money deposited for a fixed period of time.

Breakdown of Interest Rates by Tenure:

1. 30 Days to 90 Days: 4.00%
   • For short-term deposits (about 1 to 3 months), the interest rate offered is 4.00%.
   • This is considered a low-risk, low-return option, typically used by individuals who may need liquidity in the near future but still want to earn some interest.
2. 91 Days to 180 Days: 5.50%
   • For medium short-term deposits (roughly 3 to 6 months), the interest rate increases to 5.50%.
   • This is a better option for people who can lock their money away for a little longer, benefiting from a higher interest rate than the 30-90 day period.
3. 181 Days to 1 Year: 6.25%
   • Deposits that are held for 6 months to 1 year will earn 6.25% interest.
   • This tenure is often preferred by those looking for slightly higher returns but who may not want to commit to longer-term deposits.
4. 13 Months to 2 Years: 6.50%
   • For longer-term deposits that are between 1 to 2 years, the interest rate increases to 6.50%.
   • This rate offers a decent return for a medium-term commitment, typically preferred by individuals saving for short- to medium-term financial goals.
5. 25 Months to 3 Years: 6.75%
   • Deposits held for 2 to 3 years offer a 6.75% interest rate.
   • This is attractive for individuals who can afford to lock their funds for a longer period, as the rate is relatively higher compared to shorter tenures.
6. 37 Months to 5 Years: 6.75%
   • For long-term deposits ranging from 3 to 5 years, the interest rate remains at 6.75%.
   • Long-term fixed deposits are preferred by individuals who are saving for the long term and are not looking for immediate liquidity. It provides steady returns and stability.

Key Features of a Fixed Deposit Scheme:

1. Guaranteed Returns: The interest rates offered are fixed, meaning that once you lock in your money, the returns do not fluctuate, regardless of changes in the economy or market conditions.
2. Low Risk: Fixed deposits are considered low-risk investments since the principal and interest are typically insured by the bank, offering security to the depositor.
3. Penalty on Early Withdrawal: If you decide to withdraw your money before the maturity period, the bank may levy a penalty or lower the interest rate applicable to your deposit.
4. Taxation: Interest earned on fixed deposits is taxable under income tax law. Banks may also deduct tax at source (TDS) if the interest earned exceeds a certain threshold during the financial year.
5. Automatic Renewal Option: Many banks offer an auto-renewal feature, where the fixed deposit is automatically renewed for the same period upon maturity, unless the depositor provides instructions otherwise.

Benefits of This Scheme:

• Higher Interest on Longer Tenures: The longer the tenure of the deposit, the higher the interest rate, encouraging depositors to lock their money in for a longer time to earn more.
• Financial Security: This scheme is ideal for risk-averse individuals who prioritize the security of their principal over potentially higher but volatile returns from market-linked instruments.

This type of fixed deposit interest rate scheme is common across many banks and is designed to provide both flexibility and competitive returns based on how long the depositor is willing to lock in their money. It is a safe, stable way to grow your savings without the risks associated with stock markets or mutual funds.