FD interest rates: SBI vs. small finance banks – See the difference | Mint

If you are looking to invest in a fixed deposit (FD) scheme, it is recommended to compare the FD interest rates offered by different banks. This can help you make the most of your savings.

For instance, if you stand to earn an extra 60 basis points on a fixed deposit of say ₹10 lakh, your income stands to increase by ₹6,000. If that FD is locked for three years, your additional income would be ₹18,000. And this also factors in extra interest of 60 basis points. 

If the difference were 90 basis points, the additional savings would have risen to ₹27,000.

Interest rates: SBI vs. small finance banks

Here we share the difference between interest rates offered by State Bank of India (SBI) and small finance banks across tenures.

As the table above mentions, SBI offers 6.8 percent interest on one-year fixed deposits. At the same time, AU Small Finance Bank offers 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 2-year duration, the highest interest of 8.25 percent is offered by Jana Small Finance Bank which is 125 basis points higher than what the SBI offers.

On a 3-year duration, SBI offers 6.75 percent whereas the highest rate is offered by Jana Small Finance Bank.

On a 5-year duration, SBI offers 6.5 percent whereas the small finance banks offer 7.25 percent per annum.

Small finance Banks

Notably, small finance banks typically offer higher interest rates on term deposits than what the mainstream banks offer. Read this Livemint article for more details 

The highest rate on fixed deposits is offered by Unity Small Finance Bank at a 9.0% interest rate for a tenure of 1001 days and NorthEast Small Finance Bank at a 9.0% interest rate for 546 days to 1111 days tenure.