Best FD Rates from Small Finance Banks and Payment Banks in 2017
Bank FD Rates are coming down every month. Recently SBI and few other banks have reduced S.B. Account interest rates to 3.5%. This is scaring investors who depend majorly on fixed income options like bank FD’s or keep putting their money in Savings Account (especially salary account holders). However there are several new Small Finance Banks and Payment Banks which are offering high interest rates on FDs and SB accounts. There are Small Finance Banks which are offering upto 9% interest rates. There are a few Payment banks which are offering upto 7.5 % Savings Bank account interest rates. This article would provide 5 best FD Rates from Small Finance Banks and Payment banks in 2017 including some of the best SB account interest rates.
What are Small Finance Banks in India?
Small Finance Banks are formed in order to serve the unserved or underserved section of the population and to supply the credit to small business units, micro and small industries, small and marginal farmers, and other unorganized sector entities through high technology and low-cost operations. They are a type of niche banks in India. The banks that obtain the license of small finance banks can provide the basic banking facility of lending and accepting the funds. They are governed by the provisions of Reserve Bank of India, Banking Regulation Act, 1949 and other relevant statutes. 10 banks received the provisional license of small Finance Banks out of which 8 banks are now operational. The names of the licensees are as under:
6) AU Financiers
7) Capital LAB
What are Payment Banks in India?
As per Wikipedia, Payment Banks in India are is a new model of banks conceptualised by the Reserve Bank of India. These banks can accept a restricted deposit, which is currently limited to Rs 1 lakh per customer and may be increased further. These banks cannot issue loans and credit cards. Both current account and savings accounts can be operated by such banks. Payments banks can issue services like ATM cards, debit cards, net-banking and mobile-banking.
Airtel has launched India's first live payments bank. Paytm is the second such service to be launched in the country. India Post Payments Bank is the third entity to receive payments bank permit after Bharti Airtel and Paytm. Aditya Birla group earned payments bank permit on 3 March 2017.
Small Finance Banks and Payment Banks Vs Traditional Banks
The Small Finance Banks are new buddies in the market but they are offering better Fixed deposit (FD) rates than other older and larger commercial units. For example- the State Bank of India, ICICI Bank Ltd. HDFC Bank Ltd. are currently paying an interest rate of 6.90% on one-year FDs. On the contrary, these small finance banks that have started their operations before few months are offering lucrative interest rates on FDs ranging between 8-9% with additional few percent for senior citizens. Like Suryoday, ESAF are offering as high as 9% interest rate while others are also offering great interest rates.
Best FD Rates from Small Finance Bank and Payment Banks in 2017
1) Fincare Small Finance Bank (SFB)
Fincare SFB has been formed after the conversion of Disha Microfin Limited. Incorporated in June, 2017, Fincare SFB has its registered office at Ahmadabad and corporate office at Bengaluru.
These banks offer FD for very small durations also, minimum being 7 days.
If you are investing upto 1 lakh, the interest rate would be 6% and above 1 lakh, it is 7%.
The bank offers highest interest rates in the FD tenure of 2-3 years. It is as high as 9%.
For senior citizens, there is an increment of 0.50% in the interest rates all tenures of FDs.
2) Suryoday Small Finance Bank
Suryoday Small Finance Bank is among the 10 companies and the only one from Maharashtra to obtain a ’Small Finance Bank’ licence from the Reserve Bank of India (RBI). Its net worth as of March 2017 is Rs. 505 Crore (provisional) with an Asset Book size of Rs. 964 Crore, its Capital Adequacy ratio of 53%. and credit ratings A-/A1 by CARE as on date gives credence to its prudent and professional financial management practices.
Suryoday SFB gives respective rate of interest for the amount deposited below Rs. 1 crore.
It gives 6.25% Interest rates on SB account upto Rs 1 Lakh and 7.25% interest rates from Rs 1 Lakh to Rs 10 Lakhs.
It gives 9% interest on FD whose tenure is between 1 to 2 years. After taking into consideration the effect of compound interest, the rate comes to 9.31%.
Senior citizens get a benefit of extra 0.25%.
As the tenure of FD increases to 5 years, the rate diminishes till 7.5%. However, the minimum rate offered here is 4%.
You can open this bank by vising the branches at Mumbai, Navi Mumbai, Pune and Thane.
3) Equitas Small Finance Bank
Equitas Small Finance Bank is a New Age Bank that gives children, youth, families and business people across India a new and fun way to bank. In its time as a micro finance company, they silently went about enabling livelihoods and elevating lives. Today, as a small finance bank, they are also going about changing the very way banking is imagined, delivered and experienced – with FUN being the key driver.
The maximum rate of interest provided at Equitas is on FD is 7.25% which is between the tenure of 1 -3 years. After this tenure, the rate diminishes by 0.25%.
The minimum rate of interest is 5% which is provided for a FD tenure of 7-14 days. These interest rates are applicable for any amount which is less than 1 crore.
An additional rate of 0.50% is given to senior citizens on all types of FDs.
You can open account Equitas account in all major metro cities and some of the largest towns across India.
You can refer more info about Equitas SFB FD Rates here. https://www.equitasbank.com/pdf/domestic-fixed-deposit-rate.pdf
4) Airtel Payment Bank
Bharti Airtel Limited (Airtel) is a leading global telecommunications company with operations in 20 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 4 mobile service providers globally in terms of subscribers. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including national & international long distance services to carriers. In the rest of the geographies, it offers 2G, 3G wireless services and mobile commerce. Bharti Airtel had over 307 million customers across its operations at the end of November 2014.
Airtel Payment Bank does not come under the category of Small Finance Bank but is a payment bank. It is a fully digital and paperless bank.
It too offers interest on deposits in savings account. It offers 7.25% interest on deposits in savings account which in highest of its kind in India. You can get free personal accident insurance for Rs 1 Lakh. You can read complete review of Airtel Payment Bank SB Account offering upto 7.25% here.
5) ESAF Small Finance Bank (ESAF SFB)
In 2015, the Reserve Bank of India, has granted in-principle license to ESAF to launch a Small Finance bank. ESAF Small Finance Bank was one amongst the ten NBFCs to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a Small Finance Bank in the private sector. In November 2016, the final license was issued by the RBI.
The minimum rate of interest offered at ESAF SFB is 5.75%. It is applicable to any amount deposited less than 1 crore.
The highest rate is 9.0% which is offered on the FD of the tenure of 1-3 years.
Senior citizens receive 0.5% additional rate of interest on all kinds of FD.
You can read complete review of ESAF FD Schemes here.
Conclusion: I am not asking you to directly in these FD’s. Check their website about interest rates. Go through the FD investment process and limitations and take a decision.
Happy Investing in Best Small Finance Bank / Payment Banks FD offering highest interest rates.
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Best FD Rates from Small Finance Bank and Payment Banks in 2017