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List of Small Finance Banks and their latest FD rates: Which one is offering the highest interest rate?

Sunil Dhawan
Equitas, Jana, Utkarsh , AU, Small Finance Banks, fixed deposits, FDs, Interest rate,investors

With the RBI cutting the repo rate by 50 basis points since February 2019, the interest rate in the banking system is looking to come down anytime soon. Now could be the time to lock-in your funds at a higher interest rate before the banks start reducing them. Already some of the Small Finance banks have cut the rates of interest on their deposits.

As compared to leading commercial banks, the new stream of Small Finance Banks offer competitive rates of interest on their FDs and even on their savings accounts. While opening bank accounts is almost instant if one uses Aadhaar card as the KYC document, otherwise also the account opening process is faster in these banks. It is, however, not necessary to open a savings account while investing in the bank FD.

Typically, most such Small Finance Banks have a high monthly or quarterly average to maintain, however, most of them waive-off this condition in case one keeps an FD in their bank. Once the savings account is opened, activation of the debit card can be at their ATM and then net banking can be accessed. One may open FD using their net banking facility too.

Here, we look at the list of Small Finance Banks and see for which tenure do they offer the highest rate of interest as on 18th April 2019. We also look at the second-best rate of interest with its duration and the interest rate on the highest duration of the same bank.

Ujjivan Small Finance Bank

Tenure: 735 Days
Interest rate: 8.25%

Tenure: 799 Days
Interest rate: 8.60%

Tenure: 1 Year to 2 Years
Interest rate: 8.30%

Au Small Finance Bank

Tenure: 24 Months 1 Day to 36 Months
Interest rate: 8.10 per cent per annum

Tenure: 60 Months 1 Day to 120 Months
Interest rate: 7.30%

Utkarsh Small Finance Bank

Tenure: 456 Days to less than 2 years
Interest rate: 9.00 per cent per annum

Tenure: 1 Year to 455 Days
Interest rate: 8.50 per cent per annum

Tenure: More than 5 Years to 10 Years
Interest rate: 7.00 per cent per annum

Capital Small Finance Bank

Tenure: 400 Days
Interest rate: 8 per cent per annum

Tenure: 900 Days
Interest rate: 7.85 per cent per annum

Tenure: 5 Years and up to 10 Years
Interest rate: 7.65 per cent per annum

Fincare Small Finance Bank

Tenure: 24 Months 1 Day to 36 Months
Interest rate: 9 per cent per annum

Tenure: 5 Years 1 Day to 7 Years
Interest rate: 7 per cent per annum

Equitas Small Finance Bank

Tenure: 2 years 1 day to 3 years
Interest rate: 8.55 per cent per annum

Tenure: 18 months 1 day to 2 years
Interest rate: 8.4 per cent per annum

Tenure: 5 years 1 day to 10 years
Interest rate: 7 per cent per annum

Jana Small Finance Bank

Tenure: 3 years
Interest rate: 9 per cent per annum

Tenure: 2 years to less than 3 years
Interest rate: 8.5 per cent per annum

Tenure: 3 years to less than 5 years
Interest rate: 8.5 per cent per annum

ESAF Small Finance Bank

Tenure: 365 727 days
Interest rate: 8.75 per cent per annum

Tenure: 729 – 1091 days
Interest rate: 8.00 per cent per annum

Tenure: 1821 – 3652 days
Interest rate: 7.30 per cent per annum

Suryoday Small Finance Bank

Tenure: 950 Days
Interest rate: 9 per cent per annum

Tenure: Above 5 Years to 10 Years
Interest rate: 7.25 per cent per annum

Ujjivan Small Finance Bank

Tenure: 799 Days
Interest rate: 8.6 per cent per annum

Tenure: 1 Year to 2 Years
Interest rate: 8.30 per cent per annum

North East Small finance Bank

Tenure: 1 year to less than 3 years
Interest rate: 8.0 per cent per annum

Tenure: 1100 Days
Interest rate: 8.25 per cent per annum

Fixed deposits in banks have always been a popular investment option amongst most investors. Two things that primarily counts in favour of an FD are that the interest rate in a bank FD is fixed and the safety of the capital is assured. For those investors who do not look for any volatility in their savings opt for bank FD.

Safety

Regarding the safety, this is what the RBI has to say in its guidelines for such Small Finance banks The small finance bank will be subject to all prudential norms and regulations of RBI as applicable to existing commercial banks including requirement of maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

Further, each depositor of a registered insured bank including Small Finance Bank are insured up to a maximum of Rs.1 lakh for all bank deposits, such as saving, fixed, current, recurring deposits under the Deposit Insurance and Credit Guarantee Corporation Act, 1961.

Conclusion

Note that the interest from bank FD is fully taxable as per one’s tax slab. Illustratively, for someone in the highest income slab paying a tax of 31.2 per cent, a 6.5 per cent bank FD will translate into a post-tax return of about 4.47 per cent, barely matching inflation! Those in lower income slabs, ultra-conservative investors may still make use of the opportunity emanating from Small Finance Banks. Ideally, stagger your deposits across banks and maturities to take care of reinvestment risk.