It is important to note that a small difference in interest rate seemingly does not make a much difference but it actually does. For instance, if you invest ₹5 lakh in a 5-year fixed deposit (FD), a 50 basis points (BPS) higher interest can raise your income by ₹12,500.
The income grows double when the invested amount is ₹10 lakh instead of 5 lakh. And if the difference in interest rates is 75 basis points, your income can further increase by ₹37,500 over a five-year period.
Across tenures
Back to Federal Bank. On one-year deposits, the private bank now offers 7 percent and 7.5 percent to general and senior citizens. On two-year deposits, the bank offers 7.15 percent and 7.65 percent to general and senior citizens.
On three year and four-year deposits, the bank now offers 7.10 percent to general citizens and 7.60 percent to senior citizens.
(Source: federalbank.co.in)
When the deposit is of 5-year duration, the bank offers 7.10 percent to general and 7.60 percent to senior citizens.
On deposits longer than five years, the bank offers 6.60 percent to general citizens and 7.10 percent to senior citizens.
The Minimum tenor for earning the interest on Resident/ONR Fixed Deposit is 7 days. And ONR (Non-Resident Ordinary) accounts are not eligible for additional interest offered to senior citizens.
