The following is a list of small finance banks providing up to 9% interest rates on FDs with a maturity of three years, compiled by ET:
- NorthEast Small Finance Bank is offering a 9% interest rate on its FD maturing in three years.
- Suryoday Small Finance Bank is offering an 8.6% interest rate on its FDs maturing in three years.
- Utkarsh Small Finance Bank is offering an interest rate of 8.5% on its FD maturing in three years.
- Jana Small Finance Bank is offering an interest rate of 8.25% on its FD maturing in three years.
- Unity Small Finance Bank is offering an interest rate of 8.15% on its FD maturing in three years.
Source: Paisabazaar’s September 11, 2024 data quoted by ET
It is important to note that while small finance banks offer attractive fixed deposit rates, investors should be cautious when investing in these FDs.The Deposit Insurance Credit Guarantee Corporation (DICGC) insures deposits up to Rs 5 lakh, but the unique business model of small finance banks may carry slightly different risks compared to scheduled commercial banks.
Also Read | Highest FD rates: Which banks offer the best fixed deposit rates for 1-year FDs? Check list
To minimize potential risks, experts suggest limiting investments in small finance bank FDs to amounts within the DICGC coverage limit, ensuring the protection of both principal and interest.
The Reserve Bank of India (RBI) has chosen to maintain the repo rate at its current level during the most recent monetary policy review conducted in August. However, financial experts anticipate that this decision may mark the final pause before the central bank initiates a sequence of interest rate reductions in the near future.
Consequently, the interest rates offered on bank fixed deposits are likely to experience a gradual decline over the coming months. While FD investors have enjoyed the benefits of rising interest rates in the recent past, employing the same investment approach may not yield comparable returns in a scenario characterized by falling interest rates.
For individuals with surplus funds or FDs nearing maturity, the present circumstances could present an ideal opportunity to safeguard their investments by locking in the prevailing high interest rates, say experts.
