Fixed Deposits: These small finance banks provide up to 6.50% interest on 2-year deposit

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A fixed deposit (FD) is one of the safest investment options which offers a fixed return. It is still a choice of investment for many middle-class Indians as it has negligible market-related risks and offers higher interest rates than a savings account. In an FD, the account holder can deposit a specific amount for a fixed tenure.

Apart from top commercial banks, many small finance banks (SFB) also offer interests, depending on the FD tenure and the deposit amount. This interest varies from one SFB to another.

What is a small finance bank?

Small Finance Banks are a specific segment of banking created by RBI under the guidance of the Government of India with the objective of furthering financial inclusion.

The banks provide basic banking activities to un-served and underserved sections including small business units, small and marginal farmers, micro and small industries, and unorganized entities.

Like other commercial banks, these banks can undertake all basic banking activities including lending and taking deposits.

SFBs offers regular banking products like a savings account, current account, locker, ATM, fixed deposit, recurring deposit, and all kinds of assets-backed loan products such as Vehicle Finance, MSME loans, and SME loans.

They also provide higher interest rates on FDs when compared to banks.

Here are the latest fixed deposit rates:

(These interest rates are for domestic term deposits of less than Rs 2 crore for Indian citizens)