Fixed deposits (FDs) are a popular investment option for those seeking assured returns, with small finance banks offering higher interest rates than larger banks. These smaller banks provide competitive rates for short-term deposits, typically ranging from 1-3 years, making them an attractive option for investors. Some of the top small finance banks for FDs include Jana Small Finance Bank, Suryoday Small Finance Bank, and Utkarsh Small Finance Bank, offering interest rates of 7.77%, 7.75%, and 7.65%, respectively.
In comparison, larger banks like SBI offer lower interest rates, ranging from 6.25% to 6.45% for one- to three-year FDs. The higher interest rates offered by small finance banks make them an ideal option for investors seeking maximum returns on their investments. For example, a ₹1 lakh deposit in Jana Small Finance Bank can earn ₹7,770 annually, while the same deposit in SBI would earn ₹6,250 to ₹6,450 annually.
Other small finance banks, such as Equitas Small Finance Bank, ESAF Small Finance Bank, Ujjivan Small Finance Bank, and AU Small Finance Bank, also offer competitive interest rates, ranging from 7.1% to 7.6%. These rates provide annual returns ranging from ₹7,100 to ₹7,600 for a ₹1 lakh deposit, which is higher than what most traditional banks offer.
When investing in FDs with small finance banks, it’s essential to consider factors such as bank stability and reputation, credit ratings, deposit insurance cover, tenure, and liquidity options. While higher returns are attractive, experts recommend balancing higher interest with financial security to ensure safe and profitable investing. Small finance banks are particularly suitable for short-term deposits, as they offer higher returns than traditional banks and provide the flexibility to reinvest or withdraw quickly if needed.
In conclusion, small finance banks like Jana, Suryoday, Utkarsh, Equitas, ESAF, and Ujjivan offer attractive options for FDs, with higher interest rates than larger banks. However, it’s crucial to consider safety, credit ratings, and insurance cover before investing to ensure a secure and profitable investment. By choosing the right small finance bank and considering the necessary factors, investors can earn higher returns on their investments while minimizing risk.