Small finance banks offer fixed deposit (FD) rates of up to 8.1 per cent, higher than most large state-owned and private banks as analysts wait for the Reserve Bank of India’s (RBI) next monetary policy decision in June.
Data compiled by Stable Money shows that while large public-sector banks offer rates between 6 per cent and 6.7 per cent on regular FDs, several small finance banks and non-banking financial companies (NBFCs) continue to offer rates above 7.5 per cent for select tenures.
Among mainstream lenders, State Bank of India, Punjab National Bank and Bank of Baroda offer peak FD rates of around 6.45-6.6 per cent. Private sector banks such as HDFC Bank, ICICI Bank and Axis Bank are offering between 6.45 per cent and 6.5 per cent on their highest-yielding tenures.
In contrast, small finance banks are offering much higher returns. Suryoday Small Finance Bank and Utkarsh Small Finance Bank are offering up to 8.1 per cent on select deposits, while Jana Small Finance Bank is offering up to 7.77 per cent.
Higher rates concentrated in medium tenures
The data shows that the best FD rates are largely available in the one- to five-year bucket.
For instance:
IDFC FIRST Bank is offering 7.25 per cent on three-year deposits
Bandhan Bank is offering 7.25 per cent on three-year FDs
RBL Bank is offering 7.2 per cent on three-year deposits
Yes Bank is offering 7 per cent on three-year deposits
Among NBFCs, Bajaj Finance is offering up to 7.4 per cent on three-year deposits, while Shriram Finance is offering up to 7.25 per cent.
Longer-duration FDs of 10 years, however, generally offer lower returns across banks, with most large lenders offering close to 6-6.5 per cent.
|
Bank of Baroda |
PUBLIC_BANK_TYPE |
|
|
6.45 |
444D |
6.25 |
6.25 |
6.3 |
6 |
|
Bank of India |
PUBLIC_BANK_TYPE |
|
|
6.7 |
3Y |
6.5 |
6.7 |
6 |
6 |
|
PNB |
PUBLIC_BANK_TYPE |
|
|
6.6 |
444D |
6.25 |
6.3 |
6.1 |
6 |
|
SBI |
PUBLIC_BANK_TYPE |
|
|
6.45 |
444D |
6.25 |
6.3 |
6.05 |
6.05 |
|
Axis Bank |
PRIVATE_BANK_TYPE |
|
|
6.45 |
3Y |
6.25 |
6.45 |
6.45 |
6.45 |
|
Bandhan Bank |
PRIVATE_BANK_TYPE |
|
|
7.25 |
3Y |
7 |
7.25 |
5.85 |
5.85 |
|
FEDERAL BANK LTD. |
PRIVATE_BANK_TYPE |
|
|
6.75 |
3Y |
6.25 |
6.75 |
6.4 |
6.4 |
|
HDFC Bank |
PRIVATE_BANK_TYPE |
|
|
6.5 |
3Y1D-4Y7M |
6.25 |
6.45 |
6.4 |
6.15 |
|
ICICI Bank |
PRIVATE_BANK_TYPE |
|
|
6.5 |
5Y |
6.25 |
6.45 |
6.5 |
6.5 |
|
IDFC First Bank |
PRIVATE_BANK_TYPE |
|
|
7.25 |
3Y |
6.5 |
7.25 |
7.15 |
6 |
|
IndusInd Bank |
PRIVATE_BANK_TYPE |
|
|
7 |
1Y 6M |
6.75 |
6.9 |
6.65 |
6.5 |
|
Kotak Mahindra Bank |
PRIVATE_BANK_TYPE |
|
|
6.8 |
2Y |
6.5 |
6.4 |
6.25 |
6.25 |
|
RBL Bank |
PRIVATE_BANK_TYPE |
|
|
7.2 |
3Y |
7 |
7.2 |
6.7 |
6.7 |
|
South Indian Bank |
PRIVATE_BANK_TYPE |
|
|
6.8 |
30M |
6.25 |
6.2 |
5.7 |
5.7 |
|
Yes Bank |
PRIVATE_BANK_TYPE |
|
|
7 |
3Y |
6.65 |
7 |
6.75 |
6.75 |
|
AU SF Bank |
SMALL_FINANCE_BANK_TYPE |
|
|
7.25 |
3Y |
6.35 |
7.25 |
6.75 |
6.75 |
|
Jana SF Bank |
SMALL_FINANCE_BANK_TYPE |
|
|
7.77 |
5Y |
7 |
7.5 |
7.77 |
6.5 |
|
Shivalik SF Bank |
SMALL_FINANCE_BANK_TYPE |
7.80% |
1Y10M |
|
|
6 |
6 |
6.25 |
6.25 |
|
Suryoday SF Bank |
SMALL_FINANCE_BANK_TYPE |
8.10% |
2Y6M |
|
|
7.25 |
7.25 |
7.9 |
7.25 |
|
Ujjivan SF Bank |
SMALL_FINANCE_BANK_TYPE |
7.45% |
2Y |
|
|
7.25 |
7.2 |
|
|
|
Unity SF Bank |
SMALL_FINANCE_BANK_TYPE |
7.50% |
1Y |
|
|
7.5 |
6.75 |
6.75 |
|
|
Utkarsh SF Bank |
SMALL_FINANCE_BANK_TYPE |
8.10% |
1Y 301D |
|
|
6 |
7.5 |
7 |
|
|
slice SF Bank |
SMALL_FINANCE_BANK_TYPE |
7.75% |
1Y6M1D |
|
|
6.25 |
7.5 |
7 |
|
|
Bajaj Finance |
NBFC_BANK_TYPE |
7.40% |
3Y |
|
|
6.6 |
7.4 |
7.4 |
NA |
|
Shriram Finance |
NBFC_BANK_TYPE |
7.25% |
3Y |
|
|
6.75 |
7.25 |
7.25 |
NA |
Should investors lock in rates now?
“FD interest rates continue to remain attractive across banks, giving investors a good opportunity to lock in higher yields for the medium to long term,” said Saurabh Jain, cofounder and chief executive officer of Stable Money.
He added that investors should focus on the opportunities currently available instead of trying to time future rate movements linked to the RBI’s monetary policy decisions.
“Waiting purely in anticipation of a rate revision may lead to missing out on the attractive FD rates currently available,” Jain said.
What depositors should keep in mind
Financial planners often advise investors to balance returns with safety while selecting FDs. Key factors to consider include:
-
The financial strength and credibility of the institution -
Deposit insurance coverage -
Liquidity needs and tenure suitability -
Diversifying deposits across multiple banks -
Using FD laddering to manage reinvestment risk