High-yield fixed deposits: Small finance banks are offering attractive interest rates on 3-year FDs
Small Finance Banks offer higher interest rates on fixed deposits compared to traditional banks. Suryoday Small Finance Bank tops the list at 7.75 percent
Fixed deposits (FDs) remain a favoured investment option in India for their safe and assured returns. Small finance banks (SFBs) have gained popularity among FD investors for offering higher interest rates compared to traditional banks. Regulated by the Reserve Bank of India (RBI), these banks prioritise financial inclusion by catering to underserved communities.
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SFB fixed deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) for up to Rs 5 lakh per depositor per bank, covering both principal and interest. It safety cover is similar to that for deposits with bigger banks. However, SFBs may carry a higher credit risk due to their focus on microfinance and small business loans. To mitigate this risk, investors should verify the SFB's RBI registration and keep deposits under Rs 5 lakh to ensure DICGC protection.
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Here are the SFBs offering high interest rates on three-year FDs of up to Rs 1 crore, catering to resident, retail and non-senior citizens. The data, compiled by BankBazaar as of August 8, shows the best rates offered by these SFBs.
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Suryoday Small Finance Bank offers an interest rate of 7.75 percent on FDs with a tenor of three years. Among SFBs, it is the best rate. In three years, a Rs 1-lakh FD would grow to Rs 1,23,250.
Utkarsh Small Finance Bank offers an interest rate of 7.65 percent on a three-year FD. If you invest Rs 1 lakh, the amount will grow to Rs 1,22,950 on maturity.
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Equitas Small Finance Bank and ESAF Small Finance Bank offer an interest of 7.6 percent. A deposit of Rs 1 lakh will grow to Rs 1,22,800 after three years.
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Jana Small Finance Bank is offers an interest rate of 7.5 percent on a three-year FD. A deposit of Rs 1 lakh will grow to Rs 1,22,500 on maturity.
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Ujjivan Small Finance Bank is offering an interest rate of 7.45 percent on three-year FDs. A deposit of Rs 1 lakh will grow to Rs 1,22,350 on the maturity date.
AU Small Finance Bank offers an interest rate of 7.1 percent on FDs with a tenor of three years. If you invest Rs 1 lakh, the amount will grow to Rs 1,21,300 on maturity.
