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    FD interest rates: How returns offered by commercial banks, small finance banks, NBFCs compare?

    FD interest rates: How returns offered by commercial banks, small finance banks, NBFCs compare?

    FD interest rates: How returns offered by commercial banks, small finance banks, NBFCs compare?
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    By Anshul   IST (Updated)

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    Fixed deposits (FDs), also known as term deposits (TDs), are fixed income instruments that yield guaranteed returns over a pre-defined period of lock-in.

    Fixed deposits (FDs), also known as term deposits (TDs), are fixed income instruments that yield guaranteed returns over a pre-defined period of lock-in. FDs are offered by public and private sector banks, small finance banks as well as non-banking finance companies (NBFCs).
    The interest rates offered on FDs are subject to change from time to time, which also varies from lenders to lenders.
    While depositors generally consider investing in large banks when it comes to FDs, the lower interest rates have become a point of concern for them. A majority of large commercial banks have recently reduced their FD rates in tandem with the RBI's decision to cut the repo rate on multiple occasions in the recent past.
    In such a scenario, experts say, the depositors should embrace FDs offered by small finance banks and/ or NBFCs. The interest rates offered on small finance bank and company fixed deposits are higher than those on commercial bank fixed deposits.
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    At some instances, the highest FD card rate offered by some small finance banks are around 200-300 basis points (bps) more than the highest FD card rates offered by most PSUs and large private sector banks.
    The non-banking financial companies, on the other hand, offer FD rates at par or even higher than what the small finance banks offer. However, the deposits on small finance banks are considered relatively safer in comparison to those with NBFC.
    In case of corporate FDs, the returns very much depend on the profits posted by the companies.
    Here's a detailed comparison of interest rates offered by commercial banks, small finance banks and NBFCs on fixed deposits (FDs):
    SBI Fixed Deposit Rates
    State Bank of India (SBI) offers the following FD interest rates on deposits below Rs 2 crore:
    TenorsRates for publicRates for senior citizens
    7 days to 45 days2.90%3.40%
    46 days to 179 days3.90%4.40%
    180 days to 210 days4.40%4.90%
    211 days to less than 1 year4.40%4.90%
    1 year to less than 2 year5.10%5.60%
    2 years to less than 3 years5.10%5.60%
    3 years to less than 5 years5.30%5.80%
    5 years and up to 10 years5.40%6.20%
    HDFC Bank Fixed Deposit Rates
    HDFC Bank offers the following FD interest rates on deposits below Rs 2 crore:
    TenorsInterest rate for publicInterest rate for senior citizens
    7 - 14 days2.75%3.25%
    15 - 29 days3.00%3.50%
    30 - 45 days3.25%3.75%
    46 - 60 days4.00%4.50%
    61 - 90 days4.00%4.50%
    91 days - 6 months4.10%4.60%
    6 mnths 1 days - 9 mnths4.50%5.00%
    9 mnths 1 day < 1 Year4.75%5.25%
    1 Year5.25%5.75%
    1 year 1 day - 2 years5.25%5.75%
    2 years 1 day - 3 years5.35%5.85%
    3 year 1 day- 5 years5.50%6.00%
    5 years 1 day - 10 years5.50%6.25%*
    Fincare small finance bank
    Fincare small finance bank offers the following FD interest rates on deposits below Rs 2 crore:
    TenureInterest rate for publicInterest rate for senior citizens
    7 days - 45 days3.50%4.00%
    46 days - 90 days4.00%4.50%
    91 days - 180 days5.00%5.50%
    181 days - 364 days6.25%6.75%
    12 months - 15 months6.95%7.45%
    15 months 1 day - 18 months7.00%7.50%
    18 months 1 day - 21 months7.10%7.60%
    21 months 1 day - 24 months7.10%7.60%
    24 months 1 day - 30 months7.20%7.70%
    30 months 1 day - 36 months7.20%7.70%
    36 months 1 day - 42 months7.30%7.80%
    42 months 1 day - 48 months7.30%7.80%
    48 months 1 day - 59 months7.50%8.00%
    59 months 1 day - 66 months6.50%7.00%
    66 months 1 day - 84 months6.00%6.50%
    Bajaj Finserv
    Bajaj Finserv offers the following FD interest rates on deposits below Rs 5 crore:
    Tenure in MonthsMinimum deposit (in Rs.)CumulativeNon-Cumulative
    MonthlyQuarterlyHalf YearlyAnnual
    12 – 2325,0006.90%6.69%6.73%6.79%6.90%
    24 – 357.00%6.79%6.82%6.88%7.00%
    36 - 607.10%6.88%6.92%6.98%7.10%
    While, one can see that small finance banks and NBFCs offer higher rates, it's important to notice that higher interest income comes at slightly higher risk.
    Corporate FDs carry default risks, that is, the corporate not being able to return the money invested for various reasons as it totally depends on their performance. Interest incomes on both NBFCs and small finance banks are taxable at the rate of tax slab one falls under, experts opine.
    Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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