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Maximize Returns: 7 Small Finance Banks with attractive FD rates
Small finance banks offer higher FD interest rates (7.1-7.65%) than larger banks (6.45%), with DICGC insurance cover up to Rs 5 lakh, but may carry higher credit risk.
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Small finance banks (SFBs) often outshine larger banks by offering higher fixed deposit interest rates to attract customers. For instance, the State Bank of India (SBI) offers 6.45 percent on one to two years FDs, while SFBs offer 7.1-7.65 percent for the same tenure.
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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. Its 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 seven top small finance banks offering high interest rates on short-term fixed deposits with tenures between one to three years and deposit amounts up to Rs 1 crore. The data, as of October 31, has been compiled by BankBazaar.com.
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Utkarsh Small Finance Bank offers an interest rate of 7.65 percent on FDs with a tenure of one year. Among SFBs, it is the best rate. In one year, a Rs 1 lakh FD would grow to Rs 1,07,650.
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ESAF Small Finance Bank offers an interest rate of 7.60 percent on FDs with a tenure of one year. In one year, a Rs 1 lakh FD would grow to Rs 1,07,600.
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Jana Small Finance Bank offers an interest rate of 7.50 percent on a one-year FD. If you invest Rs 1 lakh, the amount will grow to Rs 1,07,500 on maturity.
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Ujjivan Small Finance Bank is offering an interest rate of 7.45 percent on one-year FD. A deposit of Rs 1 lakh will grow to Rs 1,07,450 on the maturity date.
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Equitas Small Finance Bank and Suryoday Small Finance Bank offer an interest rate of 7.4 percent. A deposit of Rs 1 lakh will grow to Rs 1,07,400 after one year.
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AU Small Finance Bank offers an interest rate of 7.1 percent on FDs with a tenure of one year. If you invest Rs 1 lakh, the amount will grow to Rs 1,07,100 on maturity.
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