Check out the latest interest rates of FDs offered by small finance banks as well as commercial banks, including SBI, HDFC Bank, Axis Bank, Yes Bank and others.
Fixed deposits have again become the flavour of the season in this rising interest rate regime. Risk-averse investors and senior citizens prefer to invest in FDs as they are relatively safe than many other investment avenues and also provide good returns in some cases.
These days, however, apart from the fixed deposits offered by major commercial banks, the FDs of small finance banks have caught the attention of investors. More because of their higher interest rates. But should you go for them? Financial experts say that there is no harm in going for them, provided you go for the good ones and also take some precautions. Some experts are also of the opinion that such fears are unfounded.
“Small finance banks (SFBs) are a niche category of commercial banks, which were exclusively created to cater to sections unserved or underserved by the banking industry. The biggest advantage of opening fixed deposits with SFBs vis a vis other commercial bank categories is the higher fixed deposit rates offered by the former. While small finance banks offer highest card rates in the range of 8.5-9% p.a. on their fixed deposits, only a few banks belonging to other commercial bank categories have their highest fixed deposit card rates of 8% and above,” says Naveen Kukreja, CEO & Co-founder, PaisaBazaar.com.
However, despite the higher interest rates offered by small finance banks, many people remain wary of opening fixed deposit accounts with them fearing the stability of such banks. Such fears, however, are unfounded given the past track record of the government and the RBI in dealing with bank failures. Moreover, just like other commercial banks, small finance bank depositors are also covered under the depositor insurance program of the Deposit Insurance and Credit Guarantee Corporation (DICGC).
“This insurance covers bank deposits of up to Rs 1 lakh, including the fixed, savings, current and recurring deposits, per depositor per bank in the event of bank failure. As both small finance banks and other commercial bank depositors are covered for the equal amount, the risk of opening and maintaining the fixed deposits are also the same,” informs Kukreja.
Whatever be the case, check out the latest interest rates of fixed deposits offered by small finance banks as well as commercial banks, including SBI, HDFC Bank, ICICI Bank, Axis Bank, Yes Bank, PNB and others: