See, for example Golden Key had given FD ràte around 30% and around after one year company had been bankrupted, what if another one or two years time government decides these banks can't service the Clients because of liquidity issues and will decide to close down government banks. and then will open new banks with low interest rates
https://www.sundaytimes.lk/090111/FinancialTimes/ft321.html
I think golden key wasn't registered as a bank, right?
these high interest rates are offered by proper banks like sampath, dfcc even government banks like boc.
and as i think, even if they do close banks, they'll have to provide the customers that interest at the closing, they may request more time to do it but surely they have to provide it since that was the agreement bank & client agreed when they started the fd.
If gov has to close banks for liquidity issues, we would have more serious issues than the interest. whole banks system, financial system would collapsed in that case, even if you've cash on hand they will be worthless. And that would affect normal saving accounts as well right? not just FDs.
If someone try to use FDs as the main investment, income or sell their properties to starts FDs should be cautious.
This may be good option for someone who has put most of the money on a normal savings account and a way to reduce the loss of the value of saved money due to the inflation.
Again we're all adults, study and research then take your decision. These are just a few options provided by gov banks and gov registered private banks, If someone is not comfortable with these FD's, just ignore these option and do what you feel safe for your money.
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