Fixed deposits (FDs) are a popular investment choice in India for their safety and guaranteed returns. Small Finance Banks (SFBs) have emerged as attractive options for FD investors, offering higher interest rates than traditional public and private sector banks. SFBs, regulated by the Reserve Bank of India (RBI), focus on financial inclusion by serving underbanked segments.
2/8
Deposit Insurance and Credit Guarantee Corporation (DICGC) covers SFB FDs, which insures deposits up to Rs 5 lakh per depositor per bank, including principal and interest. This makes SFB FDs as safe as those of larger banks for amounts within this limit. However, SFBs carry slightly higher credit risk due to their focus on microfinance and small business loans. So, investors should ensure the SFB is RBI-registered and limit investments to Rs 5 lakh to stay within DICGC protection.
3/8
Here are SFBs that offer the highest interest rates on FDs. The best rates offered by these SFBs on two-year FDs (of up to Rs 1 crore) for resident, retail, and non-senior citizens have been taken into account. Let’s examine how an investment of Rs 1 lakh grows over this period. BankBazaar has compiled the data, as of July 25.
4/8
Suryoday Small Finance Bank offers an interest rate of 8.15 percent on FDs with a tenor of two years. Among SFBs, it is the best rate. In two years, a Rs 1 lakh FD would grow to Rs 1.16 lakh.
Jana Small Finance Bank is offering an interest rate of 7.75 percent on two-year FDs. A deposit of Rs 1 lakh will grow to Rs 1.16 lakh on the maturity date.
6/8
Utkarsh Small Finance Bank offers an interest rate of 7.65 percent on FDs with a tenor of two years. If you invest Rs 1 lakh, the amount would grow to Rs 1.15 lakh on maturity.
7/8
Equitas Small Finance Bank, ESAF Small Finance Bank and Ujjivan Small Finance Bank offer an interest of 7.60 percent on two-year FDs. A deposit of Rs 1 lakh here will grow to Rs 1.15 lakh on the maturity date.
8/8
AU Small Finance Bank is offering an interest rate of 7.10 percent on two-year FDs. A deposit of Rs 1 lakh will grow to Rs 1.14 lakh on the maturity date.
