With the Reserve Bank of India’s (RBI) next Monetary Policy Committee (MPC) meeting approaching, investors are reviewing current fixed deposit (FD) interest rates before deciding where to park their money. The MPC meeting is scheduled to take place from October 5 to 7, making the prevailing deposit rates a key consideration for those planning fresh investments.
Data for seven small finance banks shows that several lenders are offering peak FD interest rates of 8% or higher on selected tenures. Suryoday Small Finance Bank has the highest rate in the data at 8.25%.
Small Finance Banks Offer FD Rates of 8% and Above
Suryoday Small Finance Bank offers the highest rate of 8.25% for a five-year FD. Utkarsh Small Finance Bank follows with a maximum rate of 8.10% for a 666-day deposit.
Equitas Small Finance Bank, ESAF Small Finance Bank, Jana Small Finance Bank and Shivalik Small Finance Bank offer maximum FD rates of 8%. AU Small Finance Bank has a peak rate of 7.40% in the supplied data.
| Bank | Highest FD Rate | Tenure |
|---|---|---|
| Suryoday Small Finance Bank | 8.25% | 5 years |
| Utkarsh Small Finance Bank | 8.10% | 666 days |
| Equitas Small Finance Bank | 8.00% | 3 years 1 day |
| ESAF Small Finance Bank | 8.00% | 800 days |
| Jana Small Finance Bank | 8.00% | Above 2 years to 3 years |
| Shivalik Small Finance Bank | 8.00% | 23 months 1 day to 27 months |
| AU Small Finance Bank | 7.40% | 30 months 1 day to 36 months |
The highest advertised rate does not apply to every deposit period. Investors therefore need to check the specific tenure linked to the rate before comparing different FD options.
FD Rates Differ Across Tenures
Interest rates can vary considerably depending on the duration of the deposit. For instance, Suryoday Small Finance Bank offers 8.25% for five years, while its three-year rate in the supplied data is 7.25%. Utkarsh Small Finance Bank offers 8.10% for 666 days, compared with 7.50% for three years.
| Bank | 1-Year Rate | 3-Year Rate | 5-Year Rate |
|---|---|---|---|
| AU Small Finance Bank | 7.40% | 6.35% | 6.75% |
| Equitas Small Finance Bank | 8.00% | 7.10% | 7.00% |
| ESAF Small Finance Bank | 8.00% | 6.00% | 5.75% |
| Jana Small Finance Bank | 8.00% | 7.00% | 6.50% |
| Shivalik Small Finance Bank | 8.00% | 6.00% | 6.25% |
| Suryoday Small Finance Bank | 8.25% | 7.25% | 7.25% |
| Utkarsh Small Finance Bank | 8.10% | 6.00% | 6.75% |
These differences underline why investors should look beyond the headline interest rate and verify the rate applicable to their chosen FD tenure.
Comparison With Other Banks
The supplied data shows that some private and public sector banks have lower maximum FD rates than the small finance banks listed above.
Among private lenders, DCB Bank offers a peak FD rate of 7.50%, while Bandhan Bank offers up to 7.45%. In the public sector banking segment, Bank of India and Punjab & Sind Bank offer maximum rates of 6.85%.
Investors considering fixed deposits around the upcoming RBI MPC meeting should check more than just the advertised interest rate. The applicable tenure, premature withdrawal rules and deposit insurance coverage are also important factors to review before opening an FD.