If you want to invest in a fixed deposit (FD) scheme, it is advisable to compare the FD interest rates of different banks. This can help you get the most out of your savings.
For example, if you earn an extra 60 basis points on a fixed deposit ₹10 lakh, your income is likely to increase ₹6,000. If that FD is locked for three years, that is your additional income ₹18,000. And that also includes an extra interest of 60 basis points.
If the difference had been 90 basis points, the additional savings would have increased to ₹27,000.
Interest Rates: SBI Vs Small Finance Banks
Here we share the difference between the interest rates offered by State Bank of India (SBI) and small finance banks across different tenors.
As the table above mentions, SBI offers 6.8 percent interest on fixed deposits with a tenure of one year. At the same time, AU Small Finance Bank is offering 7.25 percent for the same tenure. Equitas Small Finance Bank offers 8.10 percent and Jana Small Finance Bank offers 8.25 percent.
On a two-year term, the highest interest rate of 8.25 percent is offered by Jana Small Finance Bank, which is 125 basis points higher than what the SBI offers.
On a three-year term, SBI offers 6.75 percent, while the highest rate is offered by Jana Small Finance Bank.
On a five-year term, SBI offers 6.5 percent, while the small finance banks offer 7.25 percent per annum.
Small finance banks
Small finance banks in particular tend to offer higher interest rates on term deposits than regular banks. Read this Living coin article for more details
The highest fixed deposit rate is offered by Unity Small Finance Bank at an interest rate of 9.0% for a tenure of 1001 days and NorthEast Small Finance Bank at an interest rate of 9.0% for a tenure of 546 days to 1111 days.
