Many small finance banks are offering attractive fixed deposit interest rates, with Unity Small Finance Bank and NorthEast Small Finance Bank providing the highest at 9% for specific tenures

FD interest rate up to 9%: Check highest interest rate and one-year interest rate of fixed deposits of these banks The table lists various banks and their respective rates

The Reserve Bank of India (RBI) cut the repo rate in February 2025. Post this, many fixed deposit investors are looking for FD options offering highest interest rates. Currently, many small finance banks are offering the highest interest rates for as high as 9% for certain tenures.

What are Small Finance Banks?

Small Finance Bank (SFB) is a banking segment exclusively created by the RBI to aid financial inclusion by offering basic banking services to underserved and un-served sections of society. Micros and small industries, small and marginal farmers, small business units, and people employed in the unorganized sector are target customers of SFBs.
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NSC vs bank FDs: Which is a better tax saving option?

FD interest rate up to 9%
Given below are the FD interest rates of small finance banks.
The table shows below the highest interest rate offered by these banks and its corresponding tenure. The table also shows FD interest rate offered on one-year tenure.

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Bank NameInterest Rates (p.a.) Highest FD interest rate and tenure1-year FD interest rate (%) %Tenure AU Small Finance Bank8.118 months7.25Equitas Small Finance Bank8.25888 days8.1ESAF Small Finance Bank8.38888 days6Jana Small Finance Bank8.251 year to 3 years8.25NorthEast Small Finance Bank918 months 1 day to 36 months7Suryoday Small Finance Bank8.65 years8.25Ujjivan Small Finance Bank8.2518 months8.1Unity Small Finance Bank91001 days7.85Utkarsh Small Finance Bank8.52 years to 3 years; 1500 days8Source: Paisabazaar data as on March 5, 2025

Unity Small Finance Bank and NorthEast Small Finance Banks are offering the highest interest rate on fixed deposits among the small finance banks. Unity Small Finance Bank is offering the highest interest rate among small finance banks. The bank is offering 9% per annum for 1001 days. The Unity Small Finance Bank is offering one-year FD rate of 7.85% per annum.

Also read: Investors can still get 8.5% interest on this FD tenure despite DCB Bank cutting interest rate

Similarly, NorthEast Small Finance Bank gives a 9% per annum interest rate for a tenure of 18 months 1 day to 36 months. However, one-year FD is offering 7% per annum as interest rate on fixed deposits.

Suryoday Small Finance Bank is offering 8.6% per annum for 5 years, and 8.25% per annum for one-year FD deposit.

Utkarsh Small Finance Bank gives 8.5% per annum for tenures between 2 to 3 years or 1500 days, while its 1-year FD interest rate is 8% per annum.

ESAF Small Finance Bank offers the highest rate of 8.38% for 888 days, but a lower 1-year FD interest rate of 6% per annum.

Three banks are offering the highest interest rate of 8.25% per annum.
Equitas Small Finance Bank is offering maximum FD interest of 8.25% per annum for 888 days, with a 1-year FD interest rate of 8.1% per annum.
Jana Small Finance Bank provides 8.25% per annum for a period ranging from 1 to 3 years, which is also its 1-year FD interest rate.
Ujjivan Small Finance Bank provides 8.25% per annum for 18 months, and 8.1% per annum for a 1-year FD deposit.
AU Small Finance Bank is offering the highest interest rate of 8.1% per annum for an 18-month tenure. However, the one-year FD interest rate of the bank is 7.25% per annum.\

How safe are Small Finance Banks?

According to the AU Small Finance Bank, "Like other types of banks in India, the RBI regulates and governs SFBs. Therefore, all the banking norms, such as Statutory Liquidity Ratio Requirements, Cash Ratio Reserve Requirements, etc., apply to them. Moreover, the RBI also defines aspects like Eligibility Criteria and Mandatory Promoter Contribution for SFBs." Note that the small finance banks are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that bank deposits of up to Rs 5 lakh are covered under the DICGC.
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This story originally appeared on: India Times - Author:Faqs of Insurances