How Much Can Rs. 1 Lakh Earn in a Senior Citizen FD? Small Finance Bank vs Major Bank Returns Compared

If you have Rs. 1 lakh to invest and are wondering where to park your money to earn maximum returns without worrying about market fluctuations, fixed deposits (FDs) could be worth considering.

For Senior Citizens, choosing the right bank which offers the best interest rate could add extra earnings to your capital. Here's a comparison of the returns you could earn over one, three and five years, along with the risks and safety factors to consider before investing.

One-year returns

Over one year, a Rs. 1 lakh deposit at 6.75%, the rate at HDFC Bank and ICICI Bank, grows to about Rs. 1,06,923, an interest income of roughly Rs. 6,923.

At Suryoday Small Finance Bank's 7.40%, the same amount becomes about Rs. 1,07,608, or Rs. 7,608 in interest.
Unity Small Finance Bank offers 8% for one year, which takes the deposit to about Rs. 1,08,243 and the interest to Rs. 8,243.

Three-year returns

At the 6.95% offered by HDFC Bank and ICICI Bank, Rs. 1 lakh grows to about Rs. 1,22,963 in three years, earning Rs. 22,963.

Jana Small Finance Bank's 8.30% for three years pushes the maturity value to about Rs. 1,27,948, an interest income of Rs. 27,948.

That is nearly Rs. 5,000 more than the large banks on the same money.

At the same time, Utkarsh Small Finance Bank's 8% three-year rate gives about Rs. 1,26,824.

Five-year returns

A Rs. 1 lakh deposit at 6.90% grows to about Rs. 1,40,784, which means Rs. 40,784 in interest. Suryoday's 8.50% for five years takes it to about Rs. 1,52,279, or Rs. 52,279 in interest.

That is roughly Rs. 11,500 more than the large banks. Jana's 7.77% five-year rate sits in between, at about Rs. 1,46,928.

Safety and the Rs. 5 lakh limit

The higher rate comes with higher perceived risk. Small finance banks are regulated by the RBI and offer deposit insurance of up to Rs. 5 lakh per depositor. A Rs. 1 lakh deposit sits well within that cover.

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