Fixed Deposits (FDs) remain one of the most popular investment options in India due to their ease of use, guaranteed returns, flexible tenure options, and high liquidity. If you’re considering investing in an FD, you may find that nine small finance banks are currently offering more competitive interest rates than many government banks.
According to reports, the Reserve Bank of India (RBI) recently maintained the repo rate at 6.5% for the ninth consecutive time, prompting several banks to increase their FD interest rates. As a result, many government, commercial, and small finance banks are offering attractive rates on fixed deposits. Notably, many small finance banks are providing significantly higher interest rates to their investors compared to government banks.
Here are some of the top FD rates offered by small finance banks:
- AU Small Finance Bank: 18 months, 8%
- Equitas Small Finance Bank: 444 days, 8.5%
- EASF Small Finance Bank: 2 years to less than 3 years, 8.25%
- Jana Small Finance Bank: 365 days to 1095 days, 8.25%
- North East Small Finance Bank: 546 days to 1111 days, 9%
- Suryoday Small Finance Bank: 2 years 2 days, 8.65%
- Ujjivan Small Finance Bank: 12 months, 8.25%
- Unity Small Finance Bank: 1001 days, 9%
- Utkarsh Small Finance Bank: 2 years to 3 years or 1500 days, 8.25%
A common concern is whether it’s safe to deposit money in a small finance bank. In the event of a bank failure or bankruptcy, depositors are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which insures bank deposits up to Rs 5 lakh. This insurance covers deposits in savings accounts, FDs, current accounts, and recurring deposits.
Also Read: 5 Banks Offering High Returns on Fixed Deposits in 2024
Last year, Fincare Small Finance Bank also offered attractive FD rates. According to the bank’s website, they provided interest rates ranging from 3% to 8.51% on FDs of less than Rs 2 crore, with tenures spanning from 7 days to 10 years.
For shorter tenures, the bank offered:
- 3% on FDs maturing in 7 to 14 days
- 4.50% on FDs maturing in 15 to 30 days
- 3.50% on FDs maturing in 31 to 45 days
Customers could also earn:
- 5.25% interest on FDs maturing in 46 to 90 days
- 5.75% interest on FDs maturing in 91 to 180 days
- 6.50% interest on FDs maturing in 181 to 365 days