During the precipitously declining interest rate era on savings accounts, it is prudent to park money in financial institutions that offer maximum interest rates. However, while doing so, one should not overlook the factor of safety. And when it comes to safety, one must make sure to park the money in either banks or highly-rated debt instruments. Mainstream banks such as SBI (State Bank of India) offer an interest rate, which is as little as 3.5 per cent (for deposits below Rs 1 crore) but it rises to something around 6.25 per cent in case of fixed deposits (FD) for a year-long period.
Nevertheless, if one wants to derive the maximum out of your savings and deposits, one should take a hard look at the relatively high interest rates offered by small finance banks such as Fincare, ESAF and Utkarsh.
Fincare Small Finance Bank: For a savings bank account amounting to less than Rs one lakh, the bank offers an interest rate of 6 per cent, which rises to 7 per cent when the amount deposited is over Rs one lakh. In case of FDs for a one-year period, the rate of interest is 8 per cent that rises to 8.5 per cent when the depositor is a senior citizen. The long term FDs that are made for a two-year period will fetch an interest rate of 9 per cent.
ESAF Small Finance Bank: In case of savings bank accounts, the bank offers a rate of interest of a mere 4 per cent on deposits amounting to less than Rs one lakh. The interest rate rises to 6.5 per cent when the deposit amount is between Rs 1 lakh and Rs 10 lakh. In case of deposits amounting to Rs 10 lakh and above, the rate of interest is 7 per cent.
In case of fixed deposits, the rate of interest is 9 per cent when the deposits are made for a period ranging between over 1 year and less than 2 years. In case of senior citizens, the rate of interest is 9.5 per cent. For a period up to one year but over 80 days; the rate of interest us 7.5 per cent and 8 per cent for young depositors and senior citizens, respectively.
Utkarsh Small Finance Bank: For savings bank accounts, the small bank offers an interest of 6 per cent per annum. For FDs, the rate of interest is 8 per cent and 8.5 per cent for young depositors and senior citizens, respectively.