Small Finance Banks FD Interest Rates Are Better Than Large Private Banks: Check Rates If Considering FDs

Fixed Deposit (FD) is one of the most popular traditional investment instruments, availed by a large section of Indian citizens, to have an assured income after the fixed term. This article will compare the FD interest rates offered by some of the well-established private banks and small finance banks to analyze which banks are fetching better returns.

Private banks FD rates

Axis Bank is one of the largest private banks operating in India that has lucrative Fixed Deposits (FD) interest rates. For less than Rs. 2 crore investment the bank is offering 5.40% and 6.05% interest rates respectively for public and senior citizens, for 3 years to less than 5 years FDs. On the other hand, Axis Bank is offering 5.75% and 6.50% interest rates respectively for public and senior citizens, for 5 years to 10 years FDs.

Another big private bank, HDFC is offering 5.35% and 5.85% interest rates respectively for public and senior citizens, for 3 years to less than 5 years FDs. The bank is offering 5.50% and 6.25% interest rates respectively for public and senior citizens, for 5 years to 10 years FDs. The senior citizen FD rates will not be applicable for NRIs.

ICICI Bank on the other hand is also giving good rates for less than Rs. 5 crore investment. The bank is offering 5.40% and 5.90% interest rates respectively for public and senior citizens, for 3 years to less than 5 years FDs. Additionally, ICICI Bank is offering 5.60% and 6.30% interest rates respectively for public and senior citizens, for 5 years to 10 years FDs. This bank's senior citizen rates too are applicable only for domestic (Indian citizens) term deposits.

Indusind Bank's reach for FDs and saving accounts are increasing among Indian citizens. The bank is offering 6.00% and 6.50% interest rates respectively for public and senior citizens, for Above 3 years upto 61 months FDs. Indusind Bank is offering 5.50% and 6.00% interest rates respectively for public and senior citizens, for 61 month and above FDs.

Yes Bank, on the other hand, is offering the same interest rates for FDs for 3 Years to less than 10 years. Under deposits of Rs. 2 Crore, the rate for the public is 6.25%, while the senior citizens can fetch a 7.00% interest on the same deposit. The FD rates have been revised, and these rates came into effect on January 4, 2022.

Above 5 years and above FD rates comparison

Private banks	Interest rates for public	Interest rates for senior citizens
Axis Bank	5.75%	6.50%
HDFC	5.50%	6.25%
ICICI Bank	5.60%	6.30%
Indusind Bank	5.50%	6.00%
Yes Bank	6.25%	7.00%

Hence, for 5 years and above FDs, Yes Bank and Axis Bank are offering the best interest rates both for public and senior citizens.

Small finance banks FD rates

The below-mentioned small finance banks are offering better FD rates than the large-cap private banks.

Utkarsh Small Finance Bank for deposits less than Rs. 2 Crore, is offering 6.00% interest to public and 6.50% interest to senior citizens for FDs from 701 Days to 3652 Days (10 years).

Ujjivan Small Finance Bank is also fetching lucrative PA interest rates under Rs. 2 Crores FD investments. The bank is giving 6.25% interest to public and 7.00% interest to senior citizens for 3 Years to 5 Years FDs. Ujjivan Small Finance Bank is offering 6.00% interest to public and 6.75% interest to senior citizens for 5 Years to 10 Years FDs.

Suryoday Small Finance Bank interest rates for an amount less than Rs. 2 Crore is a bit better than the above-mentioned banks. The bank is offering 6.50% interest to public and 6.50% interest to senior citizens for above 3 Years to less than 5 Years FDs. The Suryoday Small Finance Bank is fetching 6.75% interest for public, and 7.00% interest for senior citizens for 5 years FDs. On the other hand, the bank is proving 6.00% interest for public, and 6.00% interest for senior citizens for above 5 years to 10 years FDs.

The Equitas Small Finance Bank is also has quite better interest rates on FDs, than the private banks. The bank is offering 5.75% interest to the public and 6.25% interest to senior citizens for 3 years to 5 years FDs. Equitas Small Finance Bank is giving 6.00% interest to the public and 6.50% interest to senior citizens for 5 years to 10 years FDs. NRIs will not be able to get the additional interest for senior citizens.

5 years or above FD rates in Small finance banks

Small finance banks	Interest rates for public	Interest rates for senior citizens
Utkarsh Small Finance Bank	6.00%	6.50%
Ujjivan Small Finance Bank (3 Years to 5 Years)	6.25%	7.00%
Suryoday Small Finance Bank (5 years)	6.75%	7.00%
Equitas Small Finance Bank	6.00%	6.50%

FD rates comparison

Comparing the FD rates offered by these 5 private banks and 4 small finance banks, it can be understood that Suryoday Small Finance Bank is offering the best rates for 5 years FDs. Among all of the Yes Bank is fetching the best FD rates, which can be compared with the small finance bank rates. All of the other banks are giving quite low returns.

Many young investors are moving away from FDs now a days because of the poor interest rates offered. Compared to FDs, the Public provident fund (PPF) interest rates are somewhat better, at 7.1%, in long term. In short term, investors are preferring mutual funds, ETFs, and SIPs, who have a better risk appetite. FDs are only securing the money, considering the high inflation rate in India, the FDs are not much profitable now. Hence, if you are investing in FDs, you should check the available rates wisely. Additionally, investing in FDs in small finance banks is quite safe; also the union government insures your FD deposits of up to Rs. 5 lakhs. So, you can also consider opening an account in any of the existing small finance banks, to get better returns.

(Also read: 3 Best Mutual Fund SIPs In ELSS (Tax-Savings) Category, 4 Star Rated By Value Research)