The highest fixed deposit slab rates of most small finance banks have increased by 25 bps or above over the last 6 months.
Saving account interest rates and fixed deposits interest rates of Small Finance banks are slowly inching upwards. Several Small Finance banks have revised the interest rates for Savings and Retail Term Deposits in March. Some banks are offering 7 per cent to 7.5 per cent on 3-year deposits to depositors.
Suryoday Small Finance Bank, Equitas Small Finance Bank and Jana Small Finance Bank are some of the Small Finance Banks which have revised their rates upwards. The FD rates in these banks have also been increased in some cases thus providing opportunity to senior citizens to earn more on their investments.
“The highest FD slab rates of most small finance banks have increased by 25 bps or above over the last 6 months. Tenure-wise, most of the rate changes by these banks have been implemented in the 1-year tenure,” says Gaurav Aggarwal – Senior Director, Paisabazaar.com.
Equitas Small Finance Bank, has announced the revision of interest rates for Savings and Retail Term Deposits from 21st March 2022. One can now avail 7% interest per annum on Savings Account for balances above Rs 5 Lakhs up to Rs 2 Crores. Senior citizens can now earn a flat rate of .50% extra over existing revised rates on deposits. For FD, senior citizens can now earn an interest of 7.25% per annum for 888 days and the others can get upto 6.75% per annum.
Suryoday Small Finance Bank revises its FD rates for senior citizens across all tenors by 20 to 50 basis points. One can now get a 7% interest rate on 3-year deposits, while senior citizens can get a 7.50 percent interest rate.
Jana Small Finance Bank has increased interest rates on the saving bank accounts, which are effective as of March 4, 2022. Jana SFB is presently offering a 4.50 percent interest rate on savings account balances up to Rs 1 lakh and offering 7 per cent interest rate on savings account balances of more than Rs 1 lakh and up to Rs 50 lakh.
As far as safety of money in Small Finance Bank is concerned, here’s what Aggarwal says – RBI has categorised 11 small finance banks as scheduled banks. This categorisation has brought the depositors of these small finance banks under the cover of depositor insurance program provided by DICGC, an RBI subsidiary. This insurance program covers cumulative deposits of up to Rs 5 lakh of each depositor, which includes their current account, savings account, fixed deposits and recurring deposits, in case of bank failure. Both interest as well as principal components of their deposits qualify for the insurance cover. Moreover, the Rs 5 lakh cover applies separately to the deposits held with each scheduled bank.