Small finance banks offer up to 8.6% return on fixed deposits, check complete list here

FD interest rates: Small finance banks and newer private banks are offering higher interest rates on three-year fixed deposits compared to established public sector banks like SBI and Union Bank of India among others. The average interest rate among the top 10 banks for three-year FDs stands at 7.6 per cent, but some small finance banks and newer private banks are offering rates as high as 8.6 per cent. This means that investors can potentially earn higher returns on their savings by choosing one of these banks, say experts.

Why Fixed Deposits matter?

Fixed deposits offer a combination of liquidity and assured interest income at regular intervals, making them an ideal choice for building an emergency fund.

Here are top 10 banks offering higher interest rates on three-year FDs:

Suryoday Small Finance Bank: Suryoday Small Finance Bank is offering 8.6 per cent interest rate, your Rs 1 lakh investment will grow to Rs 1.29 lakh in three years.

Utkarsh Small Finance Bank: With 8.5 per cent interest rate, your Rs 1 lakh investment will grow to Rs 1.28 lakh in three years.

AU Small Finance Bank and Equitas Small Finance Bank: Both the banks are offering 8 per cent interest, meaning your Rs 1 lakh will become Rs 1.27 lakh in three years.

Deutsche Bank: Among foreign banks, Deutsche Bank leads with 7.75 per cent interest rate. Your Rs 1 lakh will grow to Rs 1.26 lakh in three years.

DCB Bank: DCB Bank offers interest rate at 7.60 per cent. Rs 1 lakh investment will grow to Rs 1.25 lakh in three years.

Bandhan Bank, IDFC First Bank, IndusInd Bank, and Yes Bank: These banks offer a 7.25 per cent interest rate on three-year FDs, meaning your Rs 1 lakh will grow to Rs 1.24 lakh in three years.

Ujjivan Small Finance Bank: Ujjivan Small Finance Bank is offering 7.20 per cent interest, your Rs 1 lakh investment will become Rs 1.24 lakh in three years.

Experts emphasise that smaller private banks and small finance banks are making a concerted effort to entice investors with more competitive interest rates, aiming to attract fresh deposits.