Did you know that small finance banks often pay interest on fixed deposits (term deposit) at higher rates than commercial banks? Small finance banks, which are aimed primarily at financial inclusion, often pay higher returns on fixed deposits (FDs) compared to private and public sector commercial banks, such as State Bank of India. Small finance banks, including Ujjivan, Equitas, Utkarsh, Jana and Capital, offer interest at the rate of 5-9 per cent on fixed deposits up to Rs 2 crore, according to their websites. (Also read: SBI tax saving fixed deposit account interest rates and other key details)
Here's a comparison of interest rates on fixed deposits up to Rs 2 crore paid by few small finance banks:
Equitas
Utkarsh
Ujjivan
Jana
Capital
Here's a look at the interest rates paid by State Bank of India, the country's largest lender, on fixed deposits:
SBI
(Also read: Axis Bank revises FD interest rates)
While small finance banks offer maturities comparable with those in fixed deposits in major commercial banks, the interest rates paid by the small finance banks are often higher compared to their larger peers, say financial experts.
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