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Rising Fixed Deposit interest rate: This is where FD accounts are seeing a higher traction

More interest in Fixed Deposits has come from Western India while the traction in South is weak. Representational image

Rising Fixed Deposit interest rate: This is where FD accounts are seeing a higher traction
Fixed Deposit accounts are gaining traction. Representational image

Fixed Deposit interest rates offered by scheduled banks have been growing in the last few months. Small Finance Banks (SFBs) are even offering Fixed Deposit interest rates of up to 9% for senior citizens. Rising FD rates have led to an increase in investors’ interest.

According to a report, more interest in FDs has come from Western India while the traction in the South is weak. Also, the growth of FDs in rural and semi-urban areas is less compared to metropolitan and urban areas.

“The metropolitan market has ~60% of the overall term deposit book, and growth has touched 12% yoy, which is the best we have seen in recent years. The breadth of recovery is not uniform. We see Western India (30% of term deposits) region showing the fastest growth, whereas the South is weak on term deposits as well,” Kotak Mahindra Bank said in a note shared with media.

“The largest markets such as metropolitan and urban areas are showing the fastest growth, with rural and semi-urban still quite sluggish,” it added.

Also Read: Senior Citizens can earn Rs 27,760 interest in 3 years on Rs 1 lakh FD with this Private Bank

Best FD rates offered by banks

Small Finance Banks are currently offering a higher interest rate than leading banks like SBI, HDFC Bank, ICICI Bank, Axis Bank, PNB, Bank of Baroda etc.

For example, Unity Small Finance Bank offers FD rates up to 9% for senior citizens. This bank offers up to 8.5% interest on FD for regular depositors. Ujjivan Small Finance Bank is offering up to 8.75% interest to senior citizens on term deposits of 80 weeks (560 days).

Among other banks, Utkarsh Small Finance Bank offers 8.5% interest to senior citizens on term deposits of 700 days. Similarly, Jana Small Finance Bank offers 8.5% interest to senior citizens on term deposits of 2 to 3 years while Fincare Small Finance Bank is also offering 8.5% interest on FD to senior citizens.

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First published on: 30-11-2022 at 04:26:18 pm