Which Fixed Deposits: ICICI or IDBI?

Currently ICICI bank is offering interest at 8% p.a. for 400 days on fixed deposites while IDBI bank is offering 8.25% p.a. for 500 days.

1. is IDBI is better than ICICI since it is giving 0.25% extra with 100 days more.
2. IDBI is better if you believe the rate interest stays about the same or decline. Then you will benefit from locking in a higher rate for longer period of time.

   Comparing apple to apple,
   To achieve the same rate of returns for the 500 days @ 8.25% you will have to do 400 days @ 8% plus 100 days @ 9.03%.
   It is very unlikely that any bank will give 9% for a 100-day deposit.

   In a somewhat unlikely even (yet more likely than the 100 days @ 9%), say that the 500-day rate become 10% next year, you might rather be able to take the money out sooner to take advantage of the 10% rate.

3. given the rates, ICICI is better. because, after 400 days, you can get the money back with 8% interest and then invest it in a 100 days deposit and earn more…

Tags: hsbc