Earn 9%–15% on Senior Secured Bonds.
Lower risk. Fixed returns. Start investing on Aspero with just ₹10,000.
Explore Bonds
Fixed deposits (FDs) are among the most popular and secure investment alternatives in India. Individuals who seek a low-risk investment vehicle will find FDs appealing since they provide assured returns, flexibility in tenure, and minimum risk. However, FD interest rates differ between banks, and comparing them is critical for maximising your earnings.
In this article, we will analyse the FD interest rates of three major institutions: Shriram Finance, Suryoday Small Finance Bank, and Unity Small Finance Bank. By the conclusion, you will have a thorough understanding of the finest FD options available to help you achieve your investment objectives.
banks with the best fixed deposit returns in 2024
Understanding Fixed Deposits and FD Interest Rates
A fixed deposit is a financial product in which you deposit a lump sum amount with a bank for a specified period of time at a predetermined interest rate. Depending on the terms you choose, the bank will pay you interest either cumulatively or monthly. The FD interest rate impacts the return on your investment. It varies by bank, tenure, and depositor category (for example, general or senior citizen).
Banks and non-banking financial institutions (NBFCs) provide FDs at various interest rates depending on current economic conditions, duration, and RBI policy. The Deposit Insurance and Credit Guarantee Corporation (DICGC) covers deposits up to ₹5 lakh per depositor in the event of a bank failure, making FDs a safe option.
When evaluating FD interest rates, it is critical to consider tenure, premature withdrawal policies, senior citizen perks, and other features such as lending facilities. Let us compare the FD interest rates of three important institutions: Shriram Finance, Suryoday Small Finance Bank, and Unity Small Finance Bank.
Factors to Consider When Choosing an FD
Before getting into the comparison, it is important to understand the primary aspects to consider while selecting an FD:
Interest Rates
The most important component, as higher interest rates result in higher returns.
Tenure
FD tenures range from 7 days to 10 years. Interest rates usually rise with tenure.
Premature Withdrawal Options
Some FDs charge fines for premature withdrawal, while others provide more flexible conditions.
Senior Citizen Benefits
Most banks provide higher interest rates to older citizens (usually 0.25% to 0.50%).
Loan Facility
Some banks enable you to borrow against your FD at a slightly higher interest rate.
Shriram Finance FD Interest Rates
Shriram Finance is well-known for providing reasonable FD interest rates over a variety of tenures. Shriram Finance offers high FD returns to both regular investors and older citizens.
Interest Rates for Regular Customers
General customers’ interest rates range from 6.56% to 9.10% each year, depending on the term. Shorter tenures (12 to 24 months) are slightly lower, but longer tenures (up to 60 months) can see rates as high as 9.10%.
Interest Rates for Senior Citizens
Senior citizens benefit from higher returns, with interest rates ranging from 7.06% to 9.60% each year, giving them a significant advantage.
Tax-Saving FD
Shriram Finance provides a 5-year tax-saving FD option with an interest rate of ~8-9% per annum, making it an appropriate solution for people wishing to lower their tax bills.
Premature Withdrawal
Shriram Finance allows for early withdrawal of FDs, subject to penalties.
Loan Against FD
Investors can get a loan against their FD at a ~1-2 % interest rate above the current FD rate.
Shriram Finance’s high fixed deposit interest rates, particularly for senior persons, make it an appealing choice for long-term investments.
Suryoday Small Finance Bank FD Interest Rates
Suryoday Small Finance Bank, another top small finance bank in India, provides attractive fixed deposit interest rates that vary according to term and customer category.
Interest Rates for Regular Customers
Interest rates range from ~ 4.00% to 8.65% per annum, with the highest rate of 8.65% per annum accessible for a two-year, two-day period.
Interest Rates for Senior Citizens
Senior citizens receive additional perks, with interest rates ranging from 4.50% to 9.10% per annum, providing higher returns than regular consumers.
Tax-Saving FD
Suryoday Bank offers a 5-year tax-saving FD with an annual interest rate of ~8.25% for normal customers and ~8.75% for elderly citizens.
Premature Withdrawal
Suryoday Bank charges a 1% penalty for early withdrawal, with no option for tax-saving FDs.
Loan Against FD
Customers can take out a loan against their FD at competitive rates, making it a flexible investment alternative.
Suryoday Small Finance Bank’s FD offers are appropriate for people seeking mid-term investments with competitive FD interest rates, particularly older residents seeking higher returns.
Unity Small Finance Bank FD Interest Rates
Unity Small Finance Bank stands out for its competitive FD interest rates, especially for longer terms. The RBI has recognised Unity Bank as a scheduled bank, ensuring depositors’ protection and security.
Interest Rates for Regular Customers
Unity Bank provides interest rates ranging from ~4.50% to 9.00% per annum. The greatest annual rate of 9.00% is offered for a tenure of 1001 days, making it an ideal choice for medium-term investments.
Interest Rates for Senior Citizens
Senior citizens benefit from higher interest rates, which range from 4.50% to 9.50% per annum, with the highest rate accessible for a term of 1001 days.
Premature Withdrawal
Unity Bank allows premature withdrawals with a 1% penalty on the current interest rate. However, no interest is given on NRE fixed deposits removed before one year.
Loan Against FD
Unity Bank provides loans against FDs at a ~1% interest rate above the applicable FD rate.
Additional Features
FDs require a minimum deposit of ₹1,000 and offer monthly, quarterly, or maturity-based interest payouts.
Unity Small Finance Bank’s high FD interest rates for both normal and elderly citizens set it apart, especially for those wishing to invest for a medium-term period of 1001 days.
How to Choose the Best FD for Your Investment
When choosing an FD, it is essential to balance the following:
High Returns
If you want the best returns, Unity Small Finance Bank offers interest rates of up to 9.00% for normal customers and 9.50% for senior citizens. Shriram Finance is another fantastic choice, offering up to ~9.60% for older persons.
Tax-Saving FDs
Suryoday Small Finance Bank offers affordable tax-saving fixed deposits at rates of 8.25% for normal customers and 8.75% for senior citizens.
Early Withdrawal and Flexibility
Most banks allow for early withdrawals, however they incur fines. Unity Small Finance Bank and Suryoday Small Finance Bank both levy a 1% penalty for withdrawals, while Shriram Finance also does.
Senior Citizen Benefits
Senior people might consider Shriram Finance, which provides the highest rates of up to 9.60%.
Conclusion
Choosing the correct FD is critical to maximise your earnings while maintaining flexibility and security. By comparing FD interest rates from companies such as Shriram Finance, Suryoday Small Finance Bank, and Unity Small Finance Bank, you can make an informed decision that is consistent with your financial objectives. Whether you want high returns, tax breaks, or a dependable senior citizen program, these banks have a variety of choices to meet your needs. Before placing your investment, consider the rules for premature withdrawals and borrowing facilities.
FAQs
1. What is the highest FD interest rate currently available?
Unity Small Finance Bank has the highest FD interest rate of 9.00% for regular customers and 9.50% for senior people for 1001 days.
2. What is the maximum tenure for fixed deposits?
Fixed deposits have a maximum duration of 5 to 10 years, depending on the bank.
3. Can I prematurely withdraw my FD?
Yes, most banks allow premature withdrawals, but they may apply penalties. For example, Unity and Suryoday banks impose a 1% penalty for early withdrawals.
4. Are there any tax benefits on FDs?
Yes, banks offer tax-saving fixed deposits under Section 80C of the Income Tax Act, with a 5-year lock-in term.
5. Do senior citizens get higher FD interest rates?
Yes, older persons often receive an additional 0.25% to 0.50% above ordinary interest rates. Shriram Finance, for example, provides older persons with discounts of up to 9.60%.