Various small finance banks are currently providing competitive interest rates on fixed deposits. (AI image)
Latest Bank Fixed Deposit Interest Rates: The Reserve Bank of India (RBI) announced a 25 basis points repo rate cut in February 2025. Following this decision, numerous fixed deposit investors are seeking FD schemes with maximum interest returns. At present, several small finance banks provide interest rates reaching up to 9% for specific time periods.
Small Finance Banks (SFBs) represent a specialised banking category established by the RBI to promote financial inclusivity by delivering essential banking facilities to sections of society lacking adequate access to banking services. These banks primarily serve micro and small industries, small-scale farmers, modest business enterprises, and individuals working in the unorganised sector.
Also Read | National Savings Certificate vs Bank Fixed Deposits: Tax benefits, interest calculation & TDS compared
Fixed Deposit Interest Rates at Small Finance Banks
Various small finance banks are currently providing competitive interest rates on fixed deposits. Here’s a detailed analysis of their offerings, as per an ET report:
- Unity Small Finance Bank leads the small finance banking sector with the highest interest rate. They provide 9% per annum for deposits with a 1001-day tenure. For one-year fixed deposits, they offer 7.85% per annum.
- NorthEast Small Finance Bank matches the 9% per annum rate for deposits between 18 months 1 day to 36 months. Their one-year fixed deposit scheme carries a 7% per annum interest rate.
- For those considering Suryoday Small Finance Bank, they provide 8.6% per annum on 5-year deposits. Their one-year fixed deposit scheme offers 8.25% per annum.
- Utkarsh Small Finance Bank presents an 8.5% per annum rate for deposits ranging from 2 to 3 years or 1500 days. Their one-year fixed deposit carries an 8% per annum rate.
- ESAF Small Finance Bank provides an 8.38% interest rate for 888-day deposits. However, their one-year fixed deposit scheme offers a relatively lower rate of 6% per annum.
- Currently, three banks are providing the highest interest rate of 8.25% per annum.
- Equitas Small Finance Bank offers its maximum FD interest at 8.25% per annum for 888 days, whilst maintaining a 1-year FD interest rate of 8.1% per annum.
- Jana Small Finance Bank extends 8.25% per annum for durations between 1 to 3 years, which matches its 1-year FD interest rate.
- Ujjivan Small Finance Bank delivers 8.25% per annum for 18 months, alongside 8.1% per annum for 1-year FD deposits.
- AU Small Finance Bank presents an interest rate of 8.1% per annum for an 18-month tenure, with its one-year FD interest rate standing at 7.25% per annum.
| Highest FD interest rate and tenure | 1-year FD interest rate (%) | ||
| % | Tenure | ||
| AU Small Finance Bank | 8.1 | 18 months | 7.25 |
| Equitas Small Finance Bank | 8.25 | 888 days | 8.1 |
| ESAF Small Finance Bank | 8.38 | 888 days | 6 |
| Jana Small Finance Bank | 8.25 | 1 year to 3 years | 8.25 |
| NorthEast Small Finance Bank | 9 | 18 months 1 day to 36 months | 7 |
| Suryoday Small Finance Bank | 8.6 | 5 years | 8.25 |
| Ujjivan Small Finance Bank | 8.25 | 18 months | 8.1 |
| Unity Small Finance Bank | 9 | 1001 days | 7.85 |
| Utkarsh Small Finance Bank | 8.5 | 2 years to 3 years; 1500 days | 8 |
Source: Paisabazaar data as on March 5, 2025 quoted by ET
Regarding Small Finance Banks FD Safety:
Deposits in small finance banks are protected by DICGC insurance up to Rs 5 lakh, although financial advisers suggest caution when placing money in their fixed deposits. These banks operate differently from conventional scheduled commercial banks, which results in distinct risk considerations for their FD investments.
Financial experts recommend that investors should limit their small finance bank FD investments to stay within the DICGC insurance coverage. This approach ensures complete safety of the principal amount and accrued interest in case of unforeseen circumstances.
