Small finance banks - aimed primarily at financial inclusion - often pay higher returns on term deposits - or fixed deposits (FD) - compared to private and public sector commercial banks and financial institutions such as the post office. Small finance banks, such as Ujjivan, Equitas, Utkarsh, Jana and Capital, offer interest at the rate of 5-9 per cent on fixed deposits up to Rs 2 crore, according to their websites. While small finance banks offer maturities comparable with those in fixed deposits in major commercial banks, the interest rates paid by the small finance banks are often higher compared to their larger peers.
Small finance banks - aimed primarily at financial inclusion - often pay higher returns on term deposits - or fixed deposits (FD) - compared to private and public sector commercial banks and financial institutions such as the post office. Small finance banks, such as Ujjivan, Equitas, Utkarsh, Jana and Capital, offer interest at the rate of 5-9 per cent on fixed deposits up to Rs 2 crore, according to their websites. While small finance banks offer maturities comparable with those in fixed deposits in major commercial banks, the interest rates paid by the small finance banks are often higher compared to their larger peers.
Small finance banks - aimed primarily at financial inclusion - often pay higher returns on term deposits - or fixed deposits (FD) - compared to private and public sector commercial banks and financial institutions such as the post office. Small finance banks, such as Ujjivan, Equitas, Utkarsh, Jana and Capital, offer interest at the rate of 5-9 per cent on fixed deposits up to Rs 2 crore, according to their websites. While small finance banks offer maturities comparable with those in fixed deposits in major commercial banks, the interest rates paid by the small finance banks are often higher compared to their larger peers.
Here's a comparison of interest rates on fixed deposits (bank FDs) up to Rs 2 crore offered by five small finance banks, and major commercial banks:
Ujjivan
Equitas
Utkarsh
Jana
Capital
SBI
HDFC Bank
(Also read: Axis Bank revises FD interest rates)
Meanwhile, many banks today offer income tax benefits under a special type of fixed deposit (FD) or term deposit account. This income tax benefit can be availed by the eligible assessees against their investment - up to Rs. 1.5 lakh in a financial year - in the form of deduction from taxable income under Section 80C of the Income Tax Act. Also known as tax-saving fixed deposit or tax-saving FD, this special type of fixed deposit allows a minimum maturity period of five years and a maximum of 10 years.
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