India as a country has been going through an intense economic crisis in recent months. The Pandemic has made all trading and business activities haywire. Investors are fearful of market explosions. There has been a significant drop in market indicators. Negative sentiment has ushered in the market. However, with the fear of the Coronavirus subsiding slightly, markets are slowly opening up. During such time, investors have not ventured out to make new investments. Thus it is the Fixed Deposits that have been of great help during such situations. The mechanism of Fixed Deposits works in banking institutions. When you go to a banking institution, you deposit a certain percentage of your fund. This fund yields regular returns and also offers the option of liquidity being a stable source of monthly or yearly income. This fund is called Fixed Deposits.
Small Banking Institutions in the country have been offering high-interest rates on Fixed Deposits. Banks like IndusInd Bank and RBL Bank, which are primarily considered small-private sector banks are offering interest rates of up to 6.5%. With higher interest rates, investors are encouraged to keep more money in such private sector banks. More established and reputed private sector banks like HDFC Bank, Axis Bank and Kotak Mahindra Bank are offering lower interest rates ranging from 4.50% to 5.50%. On the other hand, public sector banking institutions like the State Bank of India, Indian Overseas Bank and the Bank of India are offering lower interest rates than the ones existing to garner a better understanding of the loan mechanism. The Interest rates at Axis Bank have been close to 5.15%, lesser compared to the smaller banking institutions operating in the country.
Thereby stable interest rates have encouraged investors to invest more money into the financial system. This has generated a better and more productive monetary environment.