Small Finance Banks were granted a license from the Reserve Bank of India and are allowed to raise money from the public for deposits and savings account. Here are a few small finance banks that beat even bank deposits in terms of interest rates.
Suryoday Small Finance Bank
This small finance bank offers an interest rate of 9 per cent on its 12 to 24 months deposit. This interest rate is exceptional given that government banks are presently offering an interest rate of just 6.5 to 7 per cent. On a similar period of 12 to 24 months senior citizens can fetch an interest rate of 9.25 per cent. A slightly longer term deposit of 24 to 36 months gives an interest rate of 8.75 per cent, while senior citizens are entitled to an interest rate of 9 per cent. The yields on these deposits can go as high as 9.58 per cent depending on the tenure of the deposits.
Uttkarsh Small Finance Bank
This is another small finance bank that offers superlative interest rates on FDs. A 456 days to less than 2 Years deposit fetches an interest rate of 8.50 per cent and thus beats interest rates of government and private sector banks in the country. Senior citizens re entitled to an extra 0.50 per cent interest on deposits. It is advisable to go for these deposits for a shorter period of time as the interest rate is higher. For a duration of 3 Years to less than 5 Years, the interest rate drops sharply to 7 per cent, which is almost similar to most other banks in the country. Here again senior citizens are entitled to an extra 0.50 per cent interest.
Ujjivan Small Finance Bank
This bank offers an interest rate of 8 per cent on a 1-2 year deposit. This is again a good 1-2 per cent higher than what most other banks in the country offer. Ujjivan received a license as a small finance bank from the Reserve Bank of India in November last year. A two Years and one day to 3 Years deposit at the bank gives an interest rate of 7.50 per cent. It is important to note that there would be a tax liability as in the case of interest earned from fixed deposits.
AU Small Finance Bank
AU Small Finance Bank offers an interest rate of 7.25 per cent for 36 Months 1 Day to 60 Months deposit. This may not be the best when compared to some of the other small finance banks, but, is much better than what commercial banks in the country offer. The interest rate on the Airtel Bank savings account is almost similar to this. Also read: What are small finance banks here