Fixed Deposits

POSTED BY maverick muguda ON March 27, 2013 10:00 pm COMMENTS (8)


 wanted to hear from you some good practices in opening Fixed Deposits. I know of the 1 Lakh cover from DICGC and the amount i want to invest is significantly more. 

I avoid co-operative banks like plague. But am confused between the perceived safety of Public Sector banks versus better interest rates from private banks. What parameters should be considered for judging the safety of Fixed deposits.


Thanks in advance,


8 replies on this article “Fixed Deposits”

  1. Dear Maverick, for the given situation that you want to park your money ultimately into Eq. MFs, why are you not using debt fund – STP – Eq. fund route? Why do you want to wait for next 6-12 months?



  2. Dear Maverick, for the given situation, the post tax return @ 30% slab ‘ll be very poor for you from these FDs & in all probabilities ‘ll fall short of inflation. So actually you ‘ll earn negative return from your FDs. Think over it.



    1. maverick muguda says:

      Dear Ashal,

      Another great reply. Thanks!

      As i move towards my retirement(which is hopefully 10-15 years from now), i believe i need income generating options. None of my real estate is rent bearing and at the current prices, the rent income generated by Flats/houses in Bangalore, where i stay is a pittance compared to the interest rates.

      My philosophy is that while i wait for the stocks to reach reasonable valuations, i will park my money in 6-12 month FDs.Additionally i would like to keep some part of my assets in liquid form as FDs.

      Again, would love to hear your views on this.


  3. Genoa says:

    ICICI bank is offering 9% interest rate for maturities between 390 days to less than 2 years

  4. I think safety is not as important as taxation and whether post-tax returns will help your cause considering the reducing power of inflation unless you are looking for regular income. Any large-cap bank like HDFC should be a decent enough in terms of safety as much as a PSU

    1. maverick muguda says:

      Thanks. What do you make of smaller players such as Karur Vysya Bank who are offering higher interest rates.

      what other invest options would you suggest? I have significant portions of my assets in Real Estate and Gold and don’t want to invest further in them. I am a value investor and waiting for the equities to be reasonably priced.


      1. I will not put all my money in one bank esp. a small one although it is much simpler from a tax point of view. If you waiting for specific stocks to be reasonably priced that is one thing. If you are waiting for the index than you are better of investing in a diversified MF through SIP.

        Your investments should be based on your goals. So once you list your goals and map your assets with those goals only then you will know how much more to invest and can then decide where.

      2. Ramesh says:

        All FDs upto 1 lakh (total in all branches of ONE bank, and inclusive of interest and principal) are insured by RBI mandate (

        So, there is no difference in the insured part b/w a deposit in KVB versus HDFC Bank or SBI. Only thing is the ceiling.

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