To build an emergency corpus, invest a part of your savings in liquid assets. Despite falling interest rates, invest a certain percentage of your portfolio in fixed deposits (FDs) that offer higher returns for a one-year tenure. While investing, do a thorough risk assessment and due diligence of the bank before investing in FDs.
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Despite falling interest rates, small finance banks and smaller private banks offer interest rates of up to 6.50 percent on one-year FDs, according to data compiled by BankBazaar. Here are the top five banks offering the best interest rates on 1-year fixed deposits.
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Suryoday Small Finance Bank offers 6.50 per cent interest on one-year FDs. Among small finance banks, this is the highest interest rate being offered. A sum of Rs 1 lakh grows to Rs 1.07 lakh in one year. The minimum investment required is Rs 1,000.
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Equitas Small Finance Bank offers 6.35 per cent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.07 lakh in one year.
IndusInd Bank offers 6 per cent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year. The minimum investment required is Rs 10,000.
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RBL Bank offers 6 per cent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year.
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Ujjivan Small Finance Bank offers 6 per cent interest on one-year FDs. A sum of Rs 1 lakh grows to Rs 1.06 lakh in one year. The minimum investment required is Rs 1,000.
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Small finance banks and smaller private banks offer higher interest rates compared to those from leading private banks, 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 September 29, 2021, as given in the respective banks’ websites. Interest rates of all listed (BSE) private banks and small finance banks considered for data compilation. Banks for which verifiable data is not available are not considered. The minimum investment amount may vary depending on the type of the term deposit account. 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.
