Category: Personal Finance

BoM Q3 net up 14% to Rs 154 cr helped by improved asset quality and higher interest income

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The bank’s gross NPAs as on December 31, 2020, were 7.69% against 16.77% on December 31, 2019, while net NPAs reduced to 2.59% in the quarter under review against 5.46% in the same period last year.

Bank of Maharashtra (BoM) on Tuesday reported 13.91% year-on-year growth in net profit for the quarter ended December 2020 to Rs 154 crore. The rise in net profit was driven by 10.12% y-o-y growth in net interest income to Rs 1,306 crore coupled with net interest margin (NIM) improving to 3.06%. BoM MD & CEO AS Rajeev said it was for the first time in four years that the bank had crossed the NIM of 3%.

The bank’s gross NPAs as on December 31, 2020, were 7.69% against 16.77% on December 31, 2019, while net NPAs reduced to 2.59% in the quarter under review against 5.46% in the same period last year. The bank has made a cumulative Covid-19 provision of Rs 955 crore. According to the Supreme Court order, the bank has not classified these accounts as NPAs but had made additional provision of Rs 150 crore, of which Rs 30 crore was in the third quarter.

Its cost to income ratio had gone down slightly and this was mainly because of a one-time expenditure of Rs 230 crore on wage arrears payable to retired employees and retirement benefits contribution, which was completely absorbed in the December quarter, the MD said.

Rajeev said the bank’s CASA deposits improved by 300 basis points to 50.91%, while provision coverage ratio improved to 90%. There was 22% growth in the retail, agriculture and MSME advances during the quarter. BoM’s retail advances grew 28.89% to Rs 27,540 crore while MSME advances were up 26.31% to Rs 20,304 crore during the quarter under review. According to the MD, this was not just pent up demand or festival sales. The bank expects growth in retail loans to continue in the fourth quarter of FY21 and even improve further. Banks have benefitted from the withdrawal of NBFC from the market, Rajeev said. This has helped in retail growth, so compared to 16%-18% growth last fiscal year, they had seen 26% to 28% growth in the retail loans this year, he added. He expects the NBFCs to bounce bank once the Covid situation is over, but this window of opportunity is available to the banks for another five to six months, he said.

In addition to growth in retail demand, investment in infrastructure and new projects had started pouring in, adding to the optimism, he said. With the government’s PLI scheme, the BoM MD expects a 2-3% increase in the share of corporate loans. Corporate loans now account for 40% of the bank’s advances.

The BoM board has already approved capital raising plans with Rs 2,000 crore to be raised through bonds and Rs 1,000 crore through equity, Rajeev said. During Q4FY21, the bank would look at raising either Tier -I or Tier-II capital of Rs 500 crore through bonds to be utilised next year, he said. They will look at raising equity next year, depending on the situation.

The bank’s total business increased 13.15 % to Rs 2,66,875 crore with total deposits increasing 14.08% to Rs 1,61,971 crore and gross advances were up 11.74 % to Rs 1,04,904 crore. The bank’s net revenues in Q2FY21 grew 15% on y-o-y basis to Rs 1,572 crore.

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PMC Bank administrator sets Feb 1 deadline for final rescue plans

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The bank had issued an expression of interest (EoI) on November 3, 2020, inviting investors for a revival or reconstruction of PMC Bank.

The administrator for Punjab & Maharashtra Co-operative (PMC) Bank has set February 1 as the deadline for prospective investors to submit final offers for the reconstruction of the bank. The due diligence process is currently being carried out by three interested parties, administrator AK Dixit told the bank’s depositors in a letter.

The bank had issued an expression of interest (EoI) on November 3, 2020, inviting investors for a revival or reconstruction of PMC Bank. Initially, four investors had shown interest. Further process has been undertaken by three of them. “The investors need to have a full understanding of the financial position of the Bank before giving their final offer. Accordingly, they are at various stages of conducting detailed due diligence. The investors have been allowed time till 01.02.2021 for submission of their final offer,” the letter said.

The bid document put out by the administrator AK Dixit said that the objective of the process of invitation of EoIs is to identify a suitable equity investor or group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations.

“Subsequent to commencement of the normal day-to-day operations, it will be open for the investor(s) to convert the bank into a small finance bank by making an application to Reserve Bank of India subject to compliance of the RBI guidelines on voluntary transition of primary (urban) co-operative banks (UCBs) into small finance banks (SFBs) dated September 27, 2018,” the document said.

According to news reports, UK-based Liberty Group, a combine of the Centrum group and BharatPe, and two business families from Mumbai and Hyderabad had expressed interest in taking over the bank.

The initial EoI said that an investor should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9%. They may also explore the option of restructuring a part of deposit liabilities into capital or capital instruments. The bank may approach the Deposit Insurance and Credit Guarantee Corporation (DICGC) for its support to pay up to Rs 5 lakh to depositors. After evaluation, viable proposals will be forwarded to the Reserve Bank of India (RBI) for its consideration for preparing a draft scheme of reconstruction and other consequential action under Section 45 of Banking Regulation Act, 1945.

The bank had total deposits of Rs 10,727.12 crore, total advances of Rs 4,472.78 crore and gross non performing assets (NPAs) worth Rs 3,518.89 crore as on March 31, 2020.The share capital of the bank is Rs 292.94 crore. It registered a net loss of Rs 6,835 crore during FY20 and has a negative net worth of Rs 5,850.61 crore.

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6 Things To Check In Your Credit Card Statement

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1. Statement date

This is the date when your credit card statement is generated. The date is important in the calculation of late payment fee.

In case you miss out on paying your dues, you will be charged interest on the amount due and this interest calculation takes your statement date into account.

The interest will be calculated taking the statement date as the first day.

2. Payment due date

2. Payment due date

This is the date by which your bank expects to receive payment on the billed amount without additional charges. It is not the date on which payment needs to be made.

In fact, a credit card user must avoid postponing payment due dates as there could be a lag in the payment made and the lender receiving the payment.

For example, if the credit card bill payment was made using a cheque, it could take 2-3 days for clearance. It is, therefore, wise to deposit the cheque at least a week before the payment due date to avoid delay in payments due to bank holidays or other unforeseen circumstances.

3. Billing cycle

3. Billing cycle

It is the period between two consecutive statement dates, which is generally a 30-day period. A billing cycle is a period for which the statement is generated.

All transactions made using your credit card during this billing period will be reflected in the statement. It will also reflect interest penalty and late payment fee (if any), as well as amount received towards payment of the bill or any returns on failed transactions during the period.

4. Grace period

4. Grace period

As per RBI rules, banks can impose late payment charges on a card only if the amount due is not paid for more than three days from the payment due date. If not paid within the grace period, the interest will become applicable and will be calculated from the payment due date.

However, it is common for credit card companies to allow a period of 20-25 days from the end of the billing cycle until the payment due. This period is called the ‘grace period’ for credit card bill payment purposes.

5. Total amount due

5. Total amount due

As the name suggests, it is the total amount due in a billing cycle period. Apart from the transactions made in the previous billing cycle, it will also include interest applicable or any late payment charges on the previous bill, service charges, annual charges and other transactional fees.

6. Minimum amount due

6. Minimum amount due

It is the minimum amount the credit card holder needs to pay on his/her bill by the payment due date to avoid being charged a late fee. It is a percentage of the outstanding amount (typically 5%) or the lowest amount (Rs 200 for example) that needs to be paid for late fees to be avoided.

It is important to understand that if the cardholder only pays the minimum amount due, interest will start accruing on the outstanding amount until it has been settled in full. The only respite from paying the minimum amount due is a waiver of late fee.

If a cardholder continues to pay only the minimum amount due, he/she will fall into a debt trap as interest on the unpaid amount becomes due instantly. Therefore, it is advisable to ignore the minimum amount due and pay the “total amount due” if possible.



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6 Things To Check In Your Credit Card Statement

Personal Finance

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1. Statement date

This is the date when your credit card statement is generated. The date is important in the calculation of late payment fee.

In case you miss out on paying your dues, you will be charged interest on the amount due and this interest calculation takes your statement date into account.

The interest will be calculated taking the statement date as the first day.

2. Payment due date

2. Payment due date

This is the date by which your bank expects to receive payment on the billed amount without additional charges. It is not the date on which payment needs to be made.

In fact, a credit card user must avoid postponing payment due dates as there could be a lag in the payment made and the lender receiving the payment.

For example, if the credit card bill payment was made using a cheque, it could take 2-3 days for clearance. It is, therefore, wise to deposit the cheque at least a week before the payment due date to avoid delay in payments due to bank holidays or other unforeseen circumstances.

3. Billing cycle

3. Billing cycle

It is the period between two consecutive statement dates, which is generally a 30-day period. A billing cycle is a period for which the statement is generated.

All transactions made using your credit card during this billing period will be reflected in the statement. It will also reflect interest penalty and late payment fee (if any), as well as amount received towards payment of the bill or any returns on failed transactions during the period.

4. Grace period

4. Grace period

As per RBI rules, banks can impose late payment charges on a card only if the amount due is not paid for more than three days from the payment due date. If not paid within the grace period, the interest will become applicable and will be calculated from the payment due date.

However, it is common for credit card companies to allow a period of 20-25 days from the end of the billing cycle until the payment due. This period is called the ‘grace period’ for credit card bill payment purposes.

5. Total amount due

5. Total amount due

As the name suggests, it is the total amount due in a billing cycle period. Apart from the transactions made in the previous billing cycle, it will also include interest applicable or any late payment charges on the previous bill, service charges, annual charges and other transactional fees.

6. Minimum amount due

6. Minimum amount due

It is the minimum amount the credit card holder needs to pay on his/her bill by the payment due date to avoid being charged a late fee. It is a percentage of the outstanding amount (typically 5%) or the lowest amount (Rs 200 for example) that needs to be paid for late fees to be avoided.

It is important to understand that if the cardholder only pays the minimum amount due, interest will start accruing on the outstanding amount until it has been settled in full. The only respite from paying the minimum amount due is a waiver of late fee.

If a cardholder continues to pay only the minimum amount due, he/she will fall into a debt trap as interest on the unpaid amount becomes due instantly. Therefore, it is advisable to ignore the minimum amount due and pay the “total amount due” if possible.



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6 Things To Check In Your Credit Card Statement

Personal Finance

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Read More/Less


1. Statement date

This is the date when your credit card statement is generated. The date is important in the calculation of late payment fee.

In case you miss out on paying your dues, you will be charged interest on the amount due and this interest calculation takes your statement date into account.

The interest will be calculated taking the statement date as the first day.

2. Payment due date

2. Payment due date

This is the date by which your bank expects to receive payment on the billed amount without additional charges. It is not the date on which payment needs to be made.

In fact, a credit card user must avoid postponing payment due dates as there could be a lag in the payment made and the lender receiving the payment.

For example, if the credit card bill payment was made using a cheque, it could take 2-3 days for clearance. It is, therefore, wise to deposit the cheque at least a week before the payment due date to avoid delay in payments due to bank holidays or other unforeseen circumstances.

3. Billing cycle

3. Billing cycle

It is the period between two consecutive statement dates, which is generally a 30-day period. A billing cycle is a period for which the statement is generated.

All transactions made using your credit card during this billing period will be reflected in the statement. It will also reflect interest penalty and late payment fee (if any), as well as amount received towards payment of the bill or any returns on failed transactions during the period.

4. Grace period

4. Grace period

As per RBI rules, banks can impose late payment charges on a card only if the amount due is not paid for more than three days from the payment due date. If not paid within the grace period, the interest will become applicable and will be calculated from the payment due date.

However, it is common for credit card companies to allow a period of 20-25 days from the end of the billing cycle until the payment due. This period is called the ‘grace period’ for credit card bill payment purposes.

5. Total amount due

5. Total amount due

As the name suggests, it is the total amount due in a billing cycle period. Apart from the transactions made in the previous billing cycle, it will also include interest applicable or any late payment charges on the previous bill, service charges, annual charges and other transactional fees.

6. Minimum amount due

6. Minimum amount due

It is the minimum amount the credit card holder needs to pay on his/her bill by the payment due date to avoid being charged a late fee. It is a percentage of the outstanding amount (typically 5%) or the lowest amount (Rs 200 for example) that needs to be paid for late fees to be avoided.

It is important to understand that if the cardholder only pays the minimum amount due, interest will start accruing on the outstanding amount until it has been settled in full. The only respite from paying the minimum amount due is a waiver of late fee.

If a cardholder continues to pay only the minimum amount due, he/she will fall into a debt trap as interest on the unpaid amount becomes due instantly. Therefore, it is advisable to ignore the minimum amount due and pay the “total amount due” if possible.



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Should I Invest In Pradhan Mantri Vaya Vandana Yojana?

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Investment

oi-Vipul Das

|

There is now a new chance to invest in the Pradhan Mantri Vaya Vandana Yojana (PMVVY) for senior citizens seeking regular income, safety and fair returns as the scheme has now been extended till March 31, 2023. With a current interest rate of 7.4% (revised on a yearly basis) which is reduced from 8 per cent if we compared to the previous year, PMVVY is open till March 31, 2021. Considering the sovereign security and the lucrative interest rate by small-savings schemes and FDs of small finance banks, you need to take serious care of it.

Should I Invest In Pradhan Mantri Vaya Vandana Yojana?

What’s there for me?

If compared to other investment vehicles for senior citizens such as Post Office monthly income scheme with an interest rate of 6.6 per cent and special fixed deposits only for senior citizens by SBI, HDFC and ICICI with a current interest rate of 6.2 per cent, 6.25 per cent and 6.3 per cent only, PMVVY is no doubt going to be the only bet here with a higher interest rate of 7.4%. Apart from the interest rate, there is no credit risk as PMVVY is backed by the government of India. For those who do not want to rethink about their portfolios now and then, the longer tenure of 10 years fits good.

POMIS Vs SCSS Vs PMVVY: Which Can Be A Good Option For Senior Citizens?

PMVVY vs other schemes

PMVVY contributes to the rising range of offerings aimed at senior citizens only. The enticing choice here could be the Senior Citizen Saving Scheme (SCSS) with an interest rate of 7.4 per cent and a tenure of 5 years only. For the current financial year, PMVVY’s interest rate is now the same as that of SCSS. Apart from SCSS there are now some small finance bank FDs for senior citizens which will give them an interest rate of up to 8%. For those looking for other investment vehicles with higher returns but same tenure these small finance bank FDs can also be the consideration, as PMVVY comes with a tenure of 10 years and maximum deposit limit is Rs 15 lakh.

Taxation and maturity period

Compared with SCSS which has 5 years of maturity period and can be extended further to a block of 3 years, the PMVVY has a longer maturity period of 10 years. Premature exit from the PMVVY is permitted only if the account holder or his spouse if suffering from a serious health condition. In detail, 98 per cent of the purchase price is compensated to the subscriber. By deducting up to 1.5 per cent penalty from the deposit SCSS also facilitates premature withdrawal. Coming to taxation SCSS contributions count for 80C tax deductions of up to Rs 1.5 lakh in a financial year but under section 80C of the Income Tax Act, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) policy does not give tax deduction benefit. As per current tax regulations, returns from this scheme will be taxable.

Should I Invest?

PMVVY is a good investment choice for regular income searching investors. It may be beneficial to consider this choice if we look at the current falling interest rate of bank FDs. Senior citizens having a low income can go for both SCSS and PMVVY as this strategy will allow you to invest up to Rs 30 lakh. If you charge up your investments in a dropping interest rate circumstance, then you are subjected to the possibility of getting your wealth at a lower interest rate upon maturity. Here, the hidden truth to generate good wealth for your retirement is to keep some capital in banks’ fixed deposits to overcome crises and encounter short-term financial objectives.



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SBI Vs HDFC Vs ICICI Vs Axis Vs PNB: FD Rates Compared For General Public

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SBI FD Rates (for amount below Rs 2 Cr)

SBI FDs will now offer 2.9 percent interest for the maturity period between seven and 45 days. Term deposits will yield 3.9 percent between 46 days and 179 days. FDs will deliver 4.4 percent over 180 days to less than one year. There will now be 10 bps higher for deposits with maturity period from 1 year and up to less than 2 years. So instead 4.9%, these deposits will offer an interest rate of 5 percent and 5.1 percent will be given by FDs maturing in 2 years or less than 3 years. FDs of 3 years or less than 5 years will deliver 5.3 percent and term deposits maturing in 5 years and up to 10 years will continue to provide 5.4 percent after the new adjustment which is effective January 8, 2021.

Tenure ROI in % per annum
7 days to 45 days 2.90
46 days to 179 days 3.90
180 days to 210 days 4.40
211 days to less than 1 year 4.40
1 year to less than 2 years 5.00
2 years to less than 3 years 5.10
3 years to less than 5 years 5.30
5 years and up to 10 years 5.40

Axis Bank FD Rates (for amount below Rs 2 Cr)

Axis Bank FD Rates (for amount below Rs 2 Cr)

Axis Bank provides FDs ranging from 7 days to 10 years throughout different tenures. For the general public, the bank offers interest on FDs ranging from 2.5 percent to 5.50 percent. Axis Bank provides a higher interest rate to senior citizens on different maturities. The bank gives returns to senior citizens ranging from 2.50 percent to 6 percent. The new interest rates of this ban are in effect from January 4, 2021.

Tenure ROI in % per annum
7 days to 29 days 2.50
30 days to 90 days 3.00
90 days to 120 days 3.50
120 days to 180 days 3.75
180 days to 360 days 4.40
2 years to less than 3 years 5.40
3 years to less than 5 years 5.40
5 years and up to 10 years 5.50

Punjab National Bank FD Rates (for amount below Rs 2 Cr)

Punjab National Bank FD Rates (for amount below Rs 2 Cr)

PNB is promising an interest rate of between 3 percent and 5.30 percent on fixed deposits maturing in the period of 7 days to 10 years. PNB proposes an interest rate of 3% on 7-45 days fixed deposits, and for a period of less than 1 year the interest rate goes up to 4.5 per cent. For a maturity period of one year to less than three years the bank promises an interest rate of 5.20 percent on term deposits. PNB is promising a 5.30 percent return on deposits maturing from 5 years to 10 years. When it comes to senior citizens they will get an additional interest rate of 50 bps above the available rates to the general public across all maturity periods for a deposit amount of less than Rs 2 Cr. The current interest rates of PNB on FDs are valid from January 1, 2021.

Tenure ROI in % per annum
7 days to 45 days 3.00
46 days to 90 days 3.25
91 days to 179 days 4.00
180 days to 270 days 4.40
271 days to less than 1 year 4.50
1 Year to 3 years 5.20
3 years to 5 years 5.30
5 years and up to 10 years 5.30

HDFC Bank FD Rates (for amount below Rs 2 Cr)

HDFC Bank FD Rates (for amount below Rs 2 Cr)

HDFC Bank pays a 2.50 percent interest rate on deposits between 7 days and 29 days. On deposits maturing in 30-90 days the interest rate is 3 per cent. 3.5 per cent on 91 days to 6 months and 4.4 per cent on 6 months on 1 day to less than one year FD. On FDs maturing in one year, the bank provides 4.9 percent interest rate. An interest rate of 4.9 percent can be earned on term deposits maturing in one year and two years. 5.15 percent will be offered by FDs maturing in 2 years to 3 years, 5.30 percent on 3 years to 5 years. There will be 5.50 percent interest on deposits for a maturity period of 5 years to 10 years. With effective from Nov 13, 2020 the interest rates are applicable.

Tenure ROI in % per annum
7 days to 29 days 2.50
30 days to 90 days 3.00
91 days to 179 days 3.50
180 days to 365 days 4.40
365 days to less than 2 years 4.90
2 years to 3 years 5.15
3 years to 5 years 5.30
5 years and up to 10 years 5.50

ICICI Bank FD Rates (for amount below Rs 2 Cr)

ICICI Bank FD Rates (for amount below Rs 2 Cr)

For a maturity period of 7 days to 29 days and 30 days to 90 days ICICI Bank provides an interest rate of 2.5 per cent and 3 per cent respectively. For FDs maturing within 91 days to 184 days, 3.5 percent. ICICI Bank offers an interest rate of 4.40 percent on deposits maturing in 185 days to less than 1 year. An interest rate of 4.9 per cent is provided on term deposits maturing in 1 year or less than 18 months. Currently, you will be provided 5 percent interest on tenure spanning 18 months to 2 years. The interest of 5.15 per cent, 5.35 percent and 5.50 per cent is provided by the bank on FDs maturing between 2 years to 3 years, 3 years to 5 years and 5 years to 10 years.

Tenure ROI in % per annum
7 days to 29 days 2.5
30 days to 90 days 3
91 days to 184 days 3.5
185 days to 365 days 4.4
1 year to less than 1.5 years 4.9
2 years to 3 years 5.15
3 years to 5 years 5.35
5 years and up to 10 years 5.5



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Nifty ends above 14,500 aided by financials; Sensex jumps 800 points, BFSI News, ET BFSI

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At close, the Sensex was up 1.72% at 49,398.29, and the Nifty added 1.68% at 14,521.20. About 2077 shares have advanced, 861 shares declined, and 139 shares are unchanged. Nifty bank index traded green at Rs 32,424 adding 1.94%, while BSE Bankex ended at 36,730 up by 1.95%.

Amongst the top gainers were- IDFC First Bank at Rs 50 adding 7.50, followed by RBL Bank at Rs 254 (-4.03), Bank of Baroda at Rs 75 (3.70%), PNB at Rs 36 (2.96%), ICICI Bank at Rs 546 (2.49%), Kotak Mahindra Bank at Rs 1,887 (-2.17%), Bandhan Bank at Rs 362 (1.77%).

Nifty Financial Services ended at 15,614 adding 2.41%. Amongst the top gainers were Cholamandalam at Rs 437 adding 7.01% followed by Bajaj Finserv at Rs 8,924 (6.82%), Indiabulls hsg at Rs 240 (6.75%),Bajaj Finance at Rs 4959 (5.07%) and Power Finance at Rs 122 (4.17).

Other key takeaways

Indian Railway Finance Corporation IPO subscribed fully:
The public offer of Indian Railway Finance Corporation has been subscribed 1.01 times on January 19, the second day of bidding, largely supported by retail investors so far. The IPO has received bids for 126.7 crore equity shares against offer size of over 124.75 crore equity shares (excluding anchor book portion), the subscription data available on the exchanges showed.

The portion set aside for retail investors witnessed subscription of 1.95 times and that of employees 18.27 times, while the reserved portion of non-institutional investors was subscribed 17.4 percent and that of qualified institutional buyers 0.02 percent.

Gold Updates
Gold prices on the MCX in the futures market were weak by a tad and this is in line with international gold pricing. At around 11:38 am, gold on the MCX quoted down by Rs. 44 or 0.09% at Rs. 48850 per 10gm. Silver on the other hand was firm at Rs. 65507 per kg.

Internationally price of gold has gained as a larger US bail-out outweighs any firmness in the dollar. Furthermore, back in India the roll out of the coronavirus vaccine which began on January 16, 2021 is seen as a positive propelling risk sentiment and in turn taking the sheen out of safe haven assets such as gold.

Rupee Updates
Indian rupee erased some of the gain but still traded higher at 73.22 per dollar, amid buying seen in the domestic equity market. It opened 11 paise higher at 73.17 per dollar against previous close of 73.28. The dollar-rupee January contract on the NSE was at Rs 73.32 in the last session. The open interest increased almost 15% in the February series while marginal decline was seen in January series contracts.

Wall Street ends higher:
U.S. stock futures moved higher early Tuesday as Wall Street looked to bounce back from a rough week ahead of President-elect Joe Biden’s inauguration. Futures contracts tied to the Dow Jones Industrial Average rose 166 points. Those for the S&P 500 and the Nasdaq 100 also traded in positive territory.

The move in futures comes after a slump for equities last week. The Nasdaq Composite and S&P 500 lost 1.5%, while the Dow was off 0.9%, respectively. It was the worst week for the three major indexes since October.



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SBI Vs HDFC Vs ICICI Vs Axis Vs PNB: FD Rates Compared For General Public

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Investment

oi-Vipul Das

|

Top banks such as the State Bank of India (SBI), HDFC Bank, Punjab National Bank (PNB), ICICI Bank and Axis Bank provide fixed deposits for periods ranging from 7 days to 10 years (FDs). It is often essential to measure the FD interest rates provided by different banks before parking your capital. The interest rates on term deposits were updated by the SBI and Axis Bank this month. Below are the current interest rates of SBI, ICICI Bank, HDFC Bank, PNB and Axis Bank on their FDs, which you need to consider before finalizing one.

SBI Vs HDFC Vs ICICI Vs Axis Vs PNB: FD Rates Compared For General Public

SBI FD Rates (for amount below Rs 2 Cr)

SBI FDs will now offer 2.9 percent interest for the maturity period between seven and 45 days. Term deposits will yield 3.9 percent between 46 days and 179 days. FDs will deliver 4.4 percent over 180 days to less than one year. There will now be 10 bps higher for deposits with maturity period from 1 year and up to less than 2 years. So instead 4.9%, these deposits will offer an interest rate of 5 percent and 5.1 percent will be given by FDs maturing in 2 years or less than 3 years. FDs of 3 years or less than 5 years will deliver 5.3 percent and term deposits maturing in 5 years and up to 10 years will continue to provide 5.4 percent after the new adjustment which is effective January 8, 2021.

Tenure ROI in % per annum
7 days to 45 days 2.90
46 days to 179 days 3.90
180 days to 210 days 4.40
211 days to less than 1 year 4.40
1 year to less than 2 years 5.00
2 years to less than 3 years 5.10
3 years to less than 5 years 5.30
5 years and up to 10 years 5.40

Axis Bank FD Rates (for amount below Rs 2 Cr)

Axis Bank provides FDs ranging from 7 days to 10 years throughout different tenures. For the general public, the bank offers interest on FDs ranging from 2.5 percent to 5.50 percent. Axis Bank provides a higher interest rate to senior citizens on different maturities. The bank gives returns to senior citizens ranging from 2.50 percent to 6 percent. The new interest rates of this ban are in effect from January 4, 2021.

Tenure ROI in % per annum
7 days to 29 days 2.50
30 days to 90 days 3.00
90 days to 120 days 3.50
120 days to 180 days 3.75
180 days to 360 days 4.40
2 years to less than 3 years 5.40
3 years to less than 5 years 5.40
5 years and up to 10 years 5.50

Punjab National Bank FD Rates (for amount below Rs 2 Cr)

PNB is promising an interest rate of between 3 percent and 5.30 percent on fixed deposits maturing in the period of 7 days to 10 years. PNB proposes an interest rate of 3% on 7-45 days fixed deposits, and for a period of less than 1 year the interest rate goes up to 4.5 per cent. For a maturity period of one year to less than three years the bank promises an interest rate of 5.20 percent on term deposits. PNB is promising a 5.30 percent return on deposits maturing from 5 years to 10 years. When it comes to senior citizens they will get an additional interest rate of 50 bps above the available rates to the general public across all maturity periods for a deposit amount of less than Rs 2 Cr. The current interest rates of PNB on FDs are valid from January 1, 2021.

Tenure ROI in % per annum
7 days to 45 days 3.00
46 days to 90 days 3.25
91 days to 179 days 4.00
180 days 270 days 4.40
271 days to less than 1 year 4.50
1 Year to 3 years 5.20
3 years to 5 years 5.30
5 years and up to 10 years 5.30

HDFC Bank FD Rates (for amount below Rs 2 Cr)

HDFC Bank pays a 2.50 percent interest rate on deposits between 7 days and 29 days. On deposits maturing in 30-90 days the interest rate is 3 per cent. 3.5 per cent on 91 days to 6 months and 4.4 per cent on 6 months on 1 day to less than one year FD. On FDs maturing in one year, the bank provides 4.9 percent interest rate. An interest rate of 4.9 percent can be earned on term deposits maturing in one year and two years. 5.15 percent will be offered by FDs maturing in 2 years to 3 years, 5.30 percent on 3 years to 5 years. There will be 5.50 percent interest on deposits for a maturity period of 5 years to 10 years. With effective from Nov 13, 2020 the interest rates are applicable.

Tenure ROI in % per annum
7 days to 29 days 2.50
30 days to 90 days 3.00
91 days to 179 days 3.50
180 days to 365 days 4.40
365 days to less than 2 years 4.90
2 years to 3 years 5.15
3 years to 5 years 5.30
5 years and up to 10 years 5.50

ICICI Bank FD Rates (for amount below Rs 2 Cr)

For a maturity period of 7 days to 29 days and 30 days to 90 days ICICI Bank provides an interest rate of 2.5 per cent and 3 per cent respectively. For FDs maturing within 91 days to 184 days, 3.5 percent. ICICI Bank offers an interest rate of 4.40 percent on deposits maturing in 185 days to less than 1 year. An interest rate of 4.9 per cent is provided on term deposits maturing in 1 year or less than 18 months. Currently, you will be provided 5 percent interest on tenure spanning 18 months to 2 years. The interest of 5.15 per cent, 5.35 percent and 5.50 per cent is provided by the bank on FDs maturing between 2 years to 3 years, 3 years to 5 years and 5 years to 10 years.

Tenure ROI in % per annum
7 days to 29 days 2.5
30 days to 90 days 3
91 days to 184 days 3.5
185 days to 365 days 4.4
1 year to less than 1.5 years 4.9
2 years to 3 years 5.15
3 years to 5 years 5.35
5 years and up to 10 years 5.5



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5 Reasons Why You Must Invest In NPS For A Peaceful Retirement

Personal Finance

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Reason 1: Guaranteed pension benefit

You confirm that you continue to earn a monthly income in the nature of a pension for your entire retirement when you invest in NPS. NPS matures when you reach 60, and 60 per cent of the corpus is credited directly to your registered bank or savings account. And with the outstanding 40 per cent, you have to purchase an annuity plan mandatorily. Which implies, the larger the number, the larger the pension. And the only secret is to start investing early to create a large corpus under NPS.

Reason 2: Pension benefit for your family

Reason 2: Pension benefit for your family

Apart from contentment can be offered by a large retirement corpus, you will question what will relate to your family upon your demise. And you must have family commitments that are still not fulfilled. For this, NPS provides you with the alternative of choosing an annuity plan that proceeds to compensate your spouse the pension amount upon your death. Until they are alive, the pension will proceed.

Reason 3: Manage your risk tolerance on your own

Reason 3: Manage your risk tolerance on your own

NPS has an in-built risk control plan to ensure that the retirement fund is insulated from market fluctuations as you get closer to retirement. You get an alternative that, as you get older, the risk is lowered automatically under NPS. You determine your initial equity-debt mix depending on the risk you are able to take in this auto asset allocation choice. And, every year, as you approach 35, a part of your savings are transferred from stocks to FD-like investment vehicles. This means that when the retirement age arrives, your equity risk is limited and your investment is wealthier.

Reason 4: Low deposit limit

Reason 4: Low deposit limit

The versatility that it brings for investments is one of the fantastic features about NPS. That is, whenever you want and also how much you want, you can contribute. Just Rs 1,000 a year is the minimum deposit provision. So you can start low, and you can contribute higher amounts as per your need and convenience. Ultimately, the capital can increase massively thanks to the influence of compounding. It also serves as a support for self-employed individuals who do not have a stable salary. Whenever they have additional money ready, they can deposit in NPS.

Reason 5: Taxation beyond section 80C

Reason 5: Taxation beyond section 80C

For tax benefits, most taxpayers use the ways permissible under Section 80C. NPS proposes a tax saving option over and above Section 80C. You can claim exemptions against the contributions to the National Pension System under Section 80CCD of the Income Tax Act. Tax benefits under Section 80 CCD (1) shall be applicable to all subscribers regardless of whether they are employed or self-employed. The maximum deduction that you can claim under Section 80CCD (1) is 10% of your salary (basic salary + dearness allowance) if you are a salaried individual. You can claim up to 20 percent of your overall gross income if you are a self-employed person. In a given financial year, the deduction amount cannot surpass Rs 1.5 lakh.

A new section, launched in 2015, is Section 80 CCD (1B). Under this, you can seek an additional exemption of Rs 50,000 for your contributions to NPS, regardless of whether you are salaried or self-employed. This exemption can be requested above the maximum deduction of Rs 1.5 lakh and can be declared in compliance with Section 80 C. Hence, you can claim up to Rs 2 lakh towards your NPS investment as a tax benefit. Section 80 CCD (2) is only valid for salaried individuals whose employer makes contributions towards NPS which can be equal to or higher than your deposits. Up to 10% of your salary, which includes basic salary and dearness allowance, can be claimed. This exemption can be made in excess of the deductions claimed in compliance with Section 80 CCD (1).

Our take

Our take

The tax advantages of NPS do not only cease at the amount of the contribution. You do not have to pay any tax on the returns and the maturity amount as an investor, too. It is because, when it comes to taxation, the NPS falls under the EEE or exempt-exempt-exempt classification. No tax on the amount invested, no tax on the returns earned and no tax on the maturity amount are the three exemptions you enjoy. Overall, NPS is an outstanding retirement investing platform with features such as investment stability and an in-built risk management approach, and several tax advantages. What one has to make sure is that all along they have been faithfully saving for his or her financial purpose.



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