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.
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.