In a context of high interest rates in the country, investors are seizing the opportunity to earn higher returns through fixed deposits (FDs). FDs, which have traditionally been favoured for their safety and reliability, have remained a popular investment option, particularly among senior citizens who benefit from additional interest rates. Several banks now offer competitive FD rates, with some institutions offering up to 50 basis points (bps) extra for senior citizens. In this context, small finance banks stand out by offering some of the highest FD rates available.
This article will discuss the top 10 small scale banks that offer the most attractive interest rates on fixed deposits. Some banks offer rates as high as 9.50 percent, specifically for senior citizens. The interest rate on fixed deposits varies from bank to bank. Almost all public and private sector banks, including the post office, today offer fixed deposits. Though there are many instruments in the market that promise higher returns than fixed deposits, this conventional mode of investment is still preferred by a large section of the population, especially in small towns and rural areas. This is mainly because fixed deposits are a risk-free instrument and also qualify for deduction under section 80 (C) of the Income Tax Act, 1961.
List of banks offering up to 9.5% interest on fixed deposits
| BANK | FD interest up to 5 years |
| Unity Small Finance Bank | 7.85% – 9.50% |
| Northeast Small Finance Bank | 7% – 9.50% |
| Suryoday Small Finance Bank | 6.85% – 9.15% |
| Shivalik Small Finance Bank | 6% – 9.05% |
| Equitas Small Finance Bank | 8.20% – 9% |
| Utkarsh Small Finance Bank | 8% – 8.75% |
| Jana Small Finance Bank | 8.25% – 8.75% |
| Ujjivan Small Finance Bank | 8.25% – 8.75% |
| RBL Bank | 7.50% – 8.60% |
| DCB Bank | 7.10% – 8.55% |
About Fixed Deposit
A fixed deposit account is an investment in which a person deposits money for a predetermined period, with a constant interest rate for the term agreed upon when opening the account. Many banks enhance the returns by offering an additional 0.5 percent interest specifically for senior citizens, compared to regular customers. In addition, banks often offer the option of taking out a collateral-free loan against fixed deposits. Typically, the loan amount available is up to 75 percent of the value of the fixed deposit, offering investors additional liquidity. This arrangement allows people to invest in fixed deposits with confidence, knowing that their returns are assured and that they have access to funds if they need them.
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