The Indian banking industry is in a race to mop up deposits from the market. In the past several months the race has intensified after the trend was discovered that more and more households were withdrawing deposits from banks and chanellising them towards the equity and mutual fund markets for better returns. But deposits constitute the life blood of the banking industry since it uses the funds for onward lending to retail borrowers and businesses.
Banks fight for deposits on the basis of brand strength, size, existing customer base, network of branches and even level of service. Small Finance Banks, which often end up playing second fiddle to the scheduled commercial banks, try to garner deposits by offering higher interest rates on Fixed Deposits (FD), which work to the advantage of the common people. Let’s see what interest rates a few prominent Small Finance Banks (SFB) are offering for 1-year and 3-year FDs, which are especially popular with a large number of people.
AU Small Finance Bank, Ujjivan SFB
For the 1-year FD, AU Small Finance Bank is offering interest rate of 7.25% to general customers and 7.45% to senior citizens. For the 3-year FDs, this bank offers 7.5% for those under 60 years and 7.71% to those above 60 (senior citizens). Ujjivan Small Finance Bank (SFB) pays 8.25% on 1-year FDs. The bank pays 7.2% on FDs with maturity period of 3 years.
Suryoday SFB, Equitas SFB
Suryoday SFB is paying 6.85% interest rate to general customers for 1-year FDs and 7.35% for senior citizens. For 3-year FDs, this bank is paying 8.6% to those under 60 years and 9.10% to senior citizens. Equitas Small Finance Bank (SFB) is offering 8.10% to general customers on 1-year FDs and 8.60% to senior citizens. It is paying 8% to general customers on 3-year FDs and 8.5% to senior citizens for the same maturity period.
Utkarsh SFB, Jana SFB
General customers of Utkarsh SFB get an interest rate of 8% on 1-year FDs while senior citizens are offered 8.6%. The same bank offers 8.5% interest rate to those below 60 years and 9.1% to those above 60 years. Jana Small Finance Bank (SFB) is one of the rare banks that pays the same rates of interest on 1-year and 3-year FDs. It pays 8.25% to general customers and 8.75% to senior citizens.
