Small finance banks are offering high interest rates on one-year fixed deposits (FDs) for senior citizens. The rates range from 8.35% to 8.75% per annum, depending on the bank. For deposits up to ₹3 crore, senior citizens can earn returns of up to 8.75% per annum at Jana Small Finance Bank, Ujjivan Small Finance Bank, and Equitas Small Finance Bank. Utkarsh Small Finance Bank and Suryoday Small Finance Bank offer 8.6% interest, while Unity Small Finance Bank offers 8.35%. It’s essential for senior citizens to consider the risk profile of these banks, which may differ from traditional commercial banks.
For safety, deposits in small finance banks are insured by the Deposit Insurance Credit Guarantee Corporation (DICGC) up to ₹5 lakh. To minimize risk, it’s recommended that senior citizens invest within the ₹5 lakh coverage limit. Jana Small Finance Bank’s FD interest calculation is based on the actual number of days in the year. Premature withdrawals after 1 year incur a 1% penalty on the contracted rate. Senior citizens can consider one-year FDs as a way to maximize returns while considering the coverage and withdrawal policies of these banks.
Source: https://www.mypunepulse.com/high-yield-fds-small-finance-banks-offer-attractive-rates-for-seniors/