I spoke to State bank of india and SBH last week while revesting my FD's and they dont charge this fee if you reinvest with the same bank/branch at the higher rate
I spoke to State bank of india and SBH last week while revesting my FD's and they dont charge this fee if you reinvest with the same bank/branch at the higher rate
that if my FD and bank interest rates are at 8 percent for 3 years, but there is a drastic increase to say 10.5 percent (something like this happened two-three years ago) that i need to continue with the 8% interest? kinda seems less even if it means losing out on the premature closing policy for a little bit
There is something called Floating Rate FD where it will vary based on the rate on the day. This is a Fixed Deposit similar to Fixed rate Home loan and Floating Rate home loan.
When we have FD with banks they should automatically update the interest rates as in the case of home loans. It is unfortunate that it does not happen and penalty is levied for pre-mature withdrawal. That is how banks are making looty of the general pubic and RBI is keeping their eyes open only watching like Bheesma watched Draupadhi vastrapaharan.
Re: FD interest
by wibas wibas on Jan 11, 2011 02:40 AM
On the contrary, I think when the interest rates are lowered, the banks are not allowed reduce the rate. Atleast that keeps the interest rate safe? But the rates generally don't drop drastically.
But the bitter truth is 8% or 7% on FDs is only eroding the value of money, because with real inflation in the range of 10-15% or more in India, FDs or saving deposit only mean loss of money. Even stock markets are not giving greater returns, I have lost nearly 1 Lakh investing in infrastructure companies :-(
Why shd the interest rate be not revised from the fresh date on FD?After all it was for 1 yr and the bank had increased it,therefore for the remainder the new increased rate shd be paid.Banks cleverly put a clause in loan agreements why not for FD also?
The banks are making a pile of money by cancelling a FD prematurely and paying a lower interest at 4% for 2 or 3 mths, instead of at 7 %.This is a strategy banks have devised in concert with RBI.Why cant RBI fix 1 April or 1 Oct as the dates for new interest rates on FD.
All FD shd then be synchronised.New FD shd be for part period and then sync with the dates.This way there would be no loss to investors.
