Where will you get the highest interest on depositing ₹1 lakh on a 1 year FD? See complete account of top 3 small finance banks

Whenever it comes to safe investment and assured returns, most of the investors first turn to bank fixed deposits (FD). While big commercial banks like State Bank of India (SBI), PNB, HDFC and ICICI are offering 6.50% to 6.80% interest on 1 year fixed deposits to general citizens and 7.00% to 7.30% to senior citizens, Small Finance Banks (SFBs) regulated by the Reserve Bank of India (RBI) are offering interest rates ranging from 7.00% on 1 year tenure to attract customers. 7.50% (up to 8.00% for senior citizens) Are offering strong interest. If you have surplus savings of ₹1,00,000 (Rs 1 lakh) and want to invest it for a full year (12 months), it is important to understand the comparative arithmetic of which of the top 3 small finance banks in the country—Unity Small Finance Bank, Suryoday Small Finance Bank and Jana Small Finance Bank—will yield the highest returns.

Unity Small Finance Bank is currently amongst the banks offering the most attractive returns on fixed deposits with a tenure of 1 year (365 days).

• Interest Rate (General Citizen): 7.50% per annum.

• Interest Rate (Senior Citizens): 8.00% per annum (50 basis points additional).

• Calculation of returns on ₹1 lakh:

  
  

  • Ordinary Citizen: On the basis of Quarterly Compounding, the total interest earned after 1 year will be approximately ₹7,714 and total maturity amount ₹1,07,714 Will be made.

  • Senior Citizen: Interest after 1 year at the rate of 8.00% is approx. ₹8,243 will be made, due to which the total amount on maturity ₹1,08,243 Will be received.

Suryoday Small Finance Bank is offering stable and competitive rates to its customers on tenure buckets of 1 year (from 1 year to 1 year 5 months).

• Interest Rate (General Citizen): 7.25% per annum.

• Interest Rate (Senior Citizens): 7.40% per annum.

• Calculation of returns on ₹1 lakh:

  
  

  • Ordinary Citizen: Total interest in 1 year with quarterly compounding is approx. ₹7,450 Will get more maturity amount ₹1,07,450 Will happen.

  • Senior Citizen: Total interest at the rate of 7.40% is approx. ₹7,609 Will get and total maturity amount ₹1,07,609 It will be done.

Jana Small Finance Bank is counted among the largest and established small finance banks in the country. This bank is providing reliable returns on FD of 1 year (365 days).

• Interest Rate (General Citizen): 7.00% per annum (7.30% on tenure from 1 year to 2 years).

• Interest Rate (Senior Citizens): 7.50% per annum (7.80% on tenure from 1 year to 2 years).

• Calculation of returns on ₹1 lakh (exactly for 1 year i.e. 365 days):

  
  

  • Ordinary Citizen: The interest earned in 1 year at the annual rate of 7.00% is approximately ₹7,186 will remain and the total maturity amount ₹1,07,186 Will be made.

  • Senior Citizen: The interest earned at the rate of 7.50% is approximately ₹7,714 and total maturity amount ₹1,07,714 Will be received.

(Note: Interest has been calculated as per the quarterly compounding formula of the banks. Interest rates may vary marginally in special periods or ‘Special Days Bucket’ of different banks.)

Often this question arises in the minds of common investors whether investing money in these banks is as safe as public or big private banks. The answer is: completely safe.

• Strict regulation by RBI: Small finance banks are also fully licensed and regulated under the Banking Regulation Act of the Reserve Bank of India.

• DICGC Insurance cover up to ₹5 lakh: The principal and interest of each depositor is pooled under the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the RBI. 100% legal insurance protection on deposits up to a maximum of ₹ 5,00,000 (Rs 5 lakh) is received. Since you are depositing only ₹1,00,000, this amount is completely covered by the insurance cover.

• TDS Deduction: Banks deduct 10% TDS if the total interest income from bank FDs exceeds ₹40,000 (₹50,000 for senior citizens) in a financial year. The interest received on ₹1 lakh is much less than this limit, hence no TDS will be deducted on it.

• Premature Withdrawal Penalty: If you break the FD in an emergency before the completion of 1 year, banks usually deduct a penalty of 0.5% to 1% from the applicable interest rate.

• Digital Booking: In all these banks, FD can be booked in just 5 to 10 minutes through Internet Banking or Mobile App through Aadhaar-OTP based Video KYC from home without visiting any branch.