Assured returns, ease of investment and high liquidity make fixed deposits one of the most preferred investment instruments in our country. However, the Reserve Bank of India’s decision to cut the repo rate by 115 basis points in 2020 alone necessitated by the Covid-19 pandemic outbreak has resulted in the lowering of bank deposit interest rates across banks. That said, small finance banks usually offer the highest fixed deposit rates in India in comparison to public, private or international banks. As such, investors could consider investing in FDs of these banks to earn higher returns after a thorough risk assessment.
That being said, FDs are usually available in multiple tenure options between 7 days and 10 years and investors can open an FD in minutes by visiting the bank branch or through the bank’s net banking or mobile banking applications. Also, senior citizens usually get preferential rates by up to 0.5% p.a. over and above the rates offered on normal FDs of corresponding tenures subject to the bank’s terms and conditions. Do note, however, that FD returns are taxable according to the investor’s income tax slab and interest income above Rs. 40,000 in a year (Rs. 50,000 for senior citizens) attract a 10% TDS per investor per bank branch. So, if you’re planning to invest in an FD, here are the highest advertised rates for non-senior citizen depositors and their corresponding tenures currently being offered by the small finance banks in India.
Highest Interest Rates for Normal FDs Offered By Small Finance Banks (for tenures up to 5 years)
|Bank Name||Highest Advertised Rate||Corresponding Tenure||W.E.F|
|Jana Small Finance Bank||7.5% p.a.||2 yrs to||Aug 11, 2020|
|Suyodaya Small Fin. Bank||7.5% p.a.||3 yrs to||Sep 15, 2020|
|Equitas Small Finance Bank||7% p.a.||2 yrs to||Nov 5, 2020|
|AU Small Finance Bank||6.75% p.a.||2 yrs to||Aug 14, 2020|
|Ujjivan Small Finance Bank||6.5% p.a.||>= 1 yr to||Aug 4, 2020|
|Fincare Small Finance Bank||6.5% p.a.||2 yrs to||Nov 9, 2020|
Disclaimer: Data as on respective banks’ websites on Nov 13, 2020. Interest rates are for normal fixed deposits amounting below Rs. 1 crore for tenures up to 5 years. Compiled by BankBazaar.com.
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