Small finance banks (SFBs) are emerging as a lucrative option for investors seeking higher interest rates on fixed deposits (FDs). While large banks offer interest rates ranging from 6.25% to 6.45%, SFBs are offering returns between 7.1% to 7.77%. This significant difference in interest rates is attracting investors to small finance banks. For instance, an investment of ₹1 lakh in SFBs can grow to ₹107,770 in a year, making it an attractive option for those seeking stable returns.
One of the key benefits of investing in SFBs is the security cover provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC). This insurance covers deposits up to ₹5 lakh per depositor, including both principal and interest, providing a sense of security for investments in smaller banks. This security cover is similar to that offered by larger banks, making SFBs a more viable option for investors.
Some of the top SFBs offering high interest rates on FDs include Jana Small Finance Bank, Suryoday Small Finance Bank, and Utkarsh Small Finance Bank. Jana Small Finance Bank offers the highest interest rate of 7.77%, followed by Suryoday Small Finance Bank at 7.75%, and Utkarsh Small Finance Bank at 7.65%. These interest rates are significantly higher than those offered by large banks, making SFBs an attractive option for investors.
It’s essential for investors to understand the interest rates and security features offered by SFBs before making an investment. With the DICGC insurance cover and high interest rates, SFBs are becoming a popular choice for those seeking to earn high interest on their investments. Overall, small finance banks are offering a competitive alternative to large banks, providing investors with a wider range of options to grow their wealth. By considering SFBs, investors can potentially earn higher returns on their investments, making them a worthwhile option to explore.