Fixed deposits: These banks offer up to 7% interest rate
Fixed deposits: Large commercial banks in the country like SBI, HDFC Bank and ICICI Bank are offering maximum 5.50% interest on FDs.
Fixed deposits constitute one of the most popular debt instrument options in the country. Many consider it a very safe instrument with guaranteed returns. According to personal finance experts, when you create an investment portfolio, you should allocate some part of it to fixed deposits. FD interest rates of different banks vary by deposit amount and deposit tenure. Small finance banks offer the highest interest rate on FDs ranging from 6.75% and 7%. Among them Suryoday Small Finance Bank offers rates ranging from 3.25% to 6.75% on deposits maturing in 7 days to 10 years to the general public.
North East Small Finance Bank offers an interest rate ranging from 3% to 7% on FDs maturing in 7 days to 10 years.
Jana Small Finance Bank offers interest rates ranging from 2.5% to 6.75%. Utkarsh Small Finance Bank offers interest rates ranging from 3% to 6.75%.
Top commercial banks
Rates in commercial banks are lower. Fixed deposits in State Bank of India (SBI) between 7 days to 10 years will give 2.9% to 5.4% interest to general customers. It offers up to 80 bps or 0.80 percentage point extra ranging from 3.40% to 6.20% on FDs to senior citizens.
HDFC Bank, the largest private sector bank in the country, offers interest ranging from 2.50% to 5.50% on deposits maturing between 7 days and 10 years. Senior citizens will get up to 75 bps extra interest rates ranging from 3% to 6.25% on FDs maturing in 7 days to 10 years.
ICICI Bank gives interest rates ranging from 2.5% to 5.50% on deposits maturing in 7 days to 10 years. Senior citizens will get between 3.00% to 6.30% for the same maturity.
RBI has created the category of small finance banks in the past few years mainly to serve small business units, small and marginal farmers, micro and small industries and unorganised sector entities.
The first small finance bank to get the license from RBI was Capital Small Finance Bank. It got the license in April 2016. A total of 10 small finance banks are operating in the country.
RBI is receiving fresh applications for licence to operate more small finance banks.