Fixed deposits (FDs) remain a popular choice for safe investments, especially for those who want assured returns. While large banks like sbi offer moderate rates, small finance banks (SFBs) are giving higher returns, making them attractive for short-term investments. Here’s a breakdown of the best FD options in small finance banks.
1. Why Consider Small Finance Banks for FDs?
Small finance banks usually offer higher interest rates than big lenders because:
They aim to attract more depositors
They offer competitive rates for short-term deposits (1-3 years)
They provide a chance for better returns on similar risk
For comparison, SBI currently offers 6.25%–6.45% on one- to three-year FDs, while some SFBs are offering 7.1%–7.77%.
2. Jana Small Finance bank Tops the Chart
Interest Rate: 7.77% for 1-3 year FDs
Example: ₹1 lakh deposit earns ₹7,770 annually
Jana bank is currently the highest-paying small finance bank for short-term FDs
This makes it ideal for investors seeking maximum returns in a safe investment vehicle.
3. Close Contenders: Suryoday and Utkarsh
Suryoday Small Finance Bank: 7.75% (₹7,750 on ₹1 lakh per year)
Utkarsh Small Finance Bank: 7.65% (₹7,650 on ₹1 lakh per year)
Both banks are excellent options for short-term deposits, offering competitive rates slightly below Jana Bank.
4. Other Attractive Options
Equitas Small Finance Bank: 7.6%
ESAF Small Finance Bank: 7.6%
Ujjivan Small Finance Bank: 7.45%
AU Small Finance Bank: 7.1%
For a ₹1 lakh deposit, these rates provide annual returns ranging from ₹7,100 to ₹7,600, offering better earnings than most traditional banks.
5. What Depositors Should Keep in Mind
While higher returns are attractive, experts recommend considering the following before investing:
Bank stability and reputation
Credit ratings of the bank
Deposit insurance cover for safety
Tenure and liquidity options
Balancing higher interest with financial security ensures safe and profitable investing.
6. Short-Term FDs Are Ideal
Small finance banks are particularly suitable for short-term deposits of 1-3 years because:
They offer higher returns than traditional banks
Investors can reinvest or withdraw quickly if needed
It’s an effective way to park funds safely while earning more
These FDs are perfect for those who want better returns without taking significant risks.
Final Word
If you are looking for higher FD interest rates, small finance banks like Jana, Suryoday, Utkarsh, Equitas, ESAF, and Ujjivan provide attractive options. While the returns are higher than large banks, it’s important to consider safety, credit ratings, and insurance cover before investing..jpg)
click and follow Indiaherald WhatsApp channel