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How RBI's repo rate hike has pushed small finance banks and private banks to offer as high as 7% on three-year FDs

Several banks have sharply hiked interest rates on fixed deposits across the tenures after the Reserve Bank of India raised repo rate by 40 basis points in this month.

May 18, 2022 / 08:18 AM IST
Shaktikanta Das
On May 4, the Reserve Bank of India (RBI) raised the repo rate by 40 basis points to 4.4 percent (100 basis points = 1 percentage point). After the repo rate announcement, several banks, including State Bank of India, Bank of Baroda, Kotak Mahindra Bank, and HDFC Bank hiked interest rates on fixed deposits (FDs) across the term deposit tenures. The small finance banks and smaller private-sector banks now offer interest rates up to 7 percent on three-year FDs, data compiled by BankBazaar shows.
Due to continuing volatility in the equity markets, many risk-averse investors may consider fixed deposits as safe havens. Investing in fixed deposits offers liquidity and ensures interest income periodically. The savings are useful to build an emergency corpus. Here are the banks offering the best interest on three-year FDs.
Due to continuing volatility in the equity markets, many risk-averse investors may consider fixed deposits as safe havens. Investing in fixed deposits offers liquidity and ensures interest income periodically. The savings are useful to build an emergency corpus. Here are the banks offering the best interest on three-year FDs.
Suryoday_SmallFinanceBank12802
Suryoday Small Finance Bank offers 7 percent interest on three-year FDs. Among small finance banks, this bank offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years. The minimum investment required is Rs 1,000.
Ujjivan Small Finance Bank
Ujjivan Small Finance Bank offers 6.9 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years. The minimum investment required is Rs 1,000.
 AU Small Finance Bank  offers 6.75 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.22 lakh in three years. The minimum investment required is Rs 1,000.
AU Small Finance Bank offers 6.75 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.22 lakh in three years. The minimum investment required is Rs 1,000.
 IndusInd Bank  and  Equitas Small Finance Bank  offer 6.5 percent interest on three-year FDs. Among private banks, IndusInd Bank offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.21 lakh in three years. The minimum investment required is Rs 10,000 at IndusInd bank.
IndusInd Bank and Equitas Small Finance Bank offer 6.5 percent interest on three-year FDs. Among private banks, IndusInd Bank offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.21 lakh in three years. The minimum investment required is Rs 10,000 at IndusInd bank.
RBL Bank
RBL Bank offers 6.30 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.21 lakh in three years.
 Bandhan Bank ,  DCB Bank  and  Yes Bank  offer 6.25 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.20 lakh in three years. The minimum investment required is Rs 10,000 at DCB Bank and Yes Bank. At Bandhan Bank, the minimum investment required is Rs 1,000.
Bandhan Bank, DCB Bank and Yes Bank offer 6.25 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.20 lakh in three years. The minimum investment required is Rs 10,000 at DCB Bank and Yes Bank. At Bandhan Bank, the minimum investment required is Rs 1,000.
IDFC First Bank
IDFC First Bank offers 6 percent interest on three-year FDs. A sum of Rs 1 lakh invested grows to Rs 1.20 lakh in three years.
The smaller private banks and small finance banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
The smaller private banks and small finance banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.

The data on FDs is as of May 11, 2022, as given on respective websites. Interest rates given are of non-senior citizens and deposit amounts below Rs 1 crore. All listed (BSE) small finance banks and private banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
The data on FDs is as of May 11, 2022, as given on respective websites. Interest rates given are of non-senior citizens and deposit amounts below Rs 1 crore. All listed (BSE) small finance banks and private banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
first published: May 18, 2022 08:18 am
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