FD Rates: Not just government banks—these banks are offering impressive returns on FDs, with interest rates up to 8.5%

Small finance banks are emerging as new players in the investment landscape. Alongside government banks, several small finance banks are offering interest rates of up to 8.5% on fixed deposits (FDs).

People generally place more trust in government banks for FDs, even though these banks typically offer interest rates between 6.5% and 7%. Given the rising inflation, these rates on deposited capital can often seem inadequate.

In the current scenario, small finance banks are emerging as significant new players in the investment sector. Some of these banks offer FD interest rates of up to 8.5%, which is 1% to 1.5% higher than what government banks offer. Here, we highlight some of these small finance banks that are helping customers earn substantial returns through attractive FD interest rates.

Top Small Finance Banks Offering the Highest FD Interest Rates

Suryoday Small Finance Bank – This bank offers a maximum interest rate of 8.25% for general customers and 8.50% for senior citizens on 5-year FDs.

Shivalik Small Finance Bank – For FDs with tenures ranging from 23 months and 1 day to 27 months, this bank offers interest rates of 8.50% for senior citizens and 8.00% for general customers.

Equitas Small Finance Bank – The bank offers interest rates of up to 8.50% for senior citizens and 8.00% for general customers.

Jana Small Finance Bank – Here, customers can earn up to 8.30% interest (for senior citizens) and 8.00% (for general customers) on FDs with tenures of 2 to 3 years. Utkarsh Small Finance Bank – Here, senior citizens earn returns of 8.25% (up to 8.15% for certain tenures) on fixed deposits, while general citizens receive up to 8.10%.

Unity Small Finance Bank – Unity Small Finance Bank offers interest rates of up to 8.00% for general citizens and up to 8.50% for senior citizens.

Is it safe to open an FD with a Small Finance Bank?

Small Finance Banks are completely safe. All Small Finance Banks fall under the purview of the DICGC (Deposit Insurance and Credit Guarantee Corporation), a wholly-owned subsidiary of the Reserve Bank of India (RBI). Consequently, if a bank were to go bankrupt or fail in the future, the DICGC is legally obligated to reimburse each depositor up to ₹5 lakh (covering both the principal amount and accrued interest). This means that if you hold FDs worth ₹5 lakh each in two different Small Finance Banks, your total investment of ₹10 lakh remains secure.