High FD Return: Rising interest rates have made Fixed Deposit (FD) attractive once again in the last one year. The Reserve Bank of India (RBI) has increased the repo rate by 250 basis points (bps) from May 2022.
To woo investors, banks have also increased the interest rates on fixed deposits. Small Finance Banks are a step ahead. Senior citizens can earn up to 9.5 percent interest rate on FDs maturing in 1001 days at Unity Small Finance Bank.
Suryoday Small Finance Bank offers an interest rate of 8.76 percent on FDs maturing in 999 days. In short, the FD interest rates of small finance banks like Unity Small Finance Bank, Equitas Small Finance Bank, Suryoday Small Finance Bank, Utkarsh Small Finance Bank and Jana Small Finance Bank are higher than the rates offered by public sector and private banks. Should you book an FD with a small finance bank to get higher returns?
Money security is important
You should also be alert about the safety of your FD when you opt for a relatively unknown small finance bank like Unity Small Finance Bank instead of a big commercial bank like SBI, HDFC Bank or ICICI Bank.
RBI also runs small finance banks
Keep in mind that small finance banks are also regulated by the Reserve Bank of India (RBI). Adil Shetty, CEO, BankBazaar.com, said, “Small finance banks are directly regulated by the RBI as they are classified by the central bank as scheduled banks like PSUs and other private sector banks.”
