Three-year FDs: These banks are offering up to 7% interest

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Fixed deposits (FDs) are considered a safe and predictable bet to grow one’s money. In the past few years all banks have reduced interest rates on fixed deposits (FDs). Despite the declining rates of interest, millions of people still trust bank FDs with their money. However, till now a few smaller private and small finance banks offer relatively higher interest rates. General customers can get up to 7% on three-year FDs. So, if you are planning to invest in a three-year FD, take a look at the top five banks offering the best interest rates. Three-year FDs are preferred by a number of people since these are neither long or short duration but somewhere in between.

Best three-year FDs

Generally, small finance banks offer higher interest on fixed deposits than other commercial banks in the country. Suryoday Small Finance Bank offers 7% interest for three-year FDs. Among small finance banks, this bank offers the best interest rates. One has to invest a minimum Rs 1,000 here.

Ujjivan Small Finance Bank, another small finance bank, offers 6.5% interest on three-year FDs. It is the second highest among all other banks. The minimum investment required is Rs 1,000.

One can deposit one’s money in RBL Bank for tenures between seven days and 20 years. Now they are offering 6.30% interest on three-year FDs. Among all private and public sector banks, this bank offers the best interest rates.

On the other hand, Yes Bank and IndusInd Bank offer 6.25% and 6% interest on three-year FDs respectively. In both cases the minimum investment is Rs 10,000.

Other lenders

But if we go through the rates of the bigger public sector banks and private lenders, the interest rate is a bit low. The rate is between 5.25% and 5.40% for the tenure of three years.

SBI offers 5.30% for a three-year tenure while PNB and BoB both offer 5.25% for this tenure.

Private lender HDFC Bank offers 5.30% for three-year tenure. ICICI Bank and Axis Bank offer 5.35% and 5.40% for the same period.

The smaller private banks and small finance banks are offering higher interest rates to attract new deposits. Deposits of up to Rs 5 lakh is insured under Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI.