Nifty99000 100%

Sensex99000 100%

Exclusive

FD Interest Rates: Widening Gap Between PSBs & Pvt Banks

Author: Dasari Sreenivasa Rao/Wednesday, November 27, 2019/Categories: Exclusive

Rate this article:
5.0
FD Interest Rates: Widening Gap  Between PSBs & Pvt Banks

Despite, several investment products, banks’ fixed deposit schemes are always considered as one of the most preferred and safe investment. On the other hand, small finance banks are offering attractive interest rates on fixed deposits when compared with major PSBs. For instance, Fincare Small Finance Bank offers highest interest at the rate of nine per cent on FDs maturing in 24 months to 36 months. However, PSBs enjoy trust of depositors, who consider them as safe place for their hard-earned money.

The largest public-sector lender State Bank of India (SBI) finished at the bottom of the fixed deposit (FD) interest rates offered by public-sector banks (PSBs), while Union Bank of India (UBI) topped the latest list. UBI offers 6.6 per cent interest rate on FD less than one year as against 6.25 per cent of SBI, according to a latest report compiled by BankBazaar.com.

As per the data from BankBazaar.com, UBI is followed by IDBI Bank with 6.45 per cent, Indian Bank with 6.45 and Punjab National Bank (PNB) with 6.4 per cent. Other PSBs-- Canara Bank, Bank of Baroda (BoB),  Central Bank of India and Syndicate Bank are also offering 6.4 per cent on FDs with below one-year tenure.

Housing finance companies are competing with PSBs as they offer attractive interest rates on par with small finance banks. For instance, LIC Housing Finance is offering interest rate of 7.80-8% on deposits of one year to five years. These housing finance firms enjoy trust of depositors like PSBs. PNB Housing Finance is offering 8.25-8.45% on deposits of 1-10 years. Sriram Transport Finance is offering 8.25-11.13% on 1-5 year tenures.

FD rates above 8.5%

The RBI-regulated small finance banks are moving ahead in attracting salaried people to their fixed deposit schemes by offering higher interest rates. For instance, Fincare Small Finance Bank is offering highest nine per cent interest rate on select maturities for general customers. Suryoday Small Finance Bank and Utkarsh Small Finance Bank offer 8.5 per cent and 8.75 per cent interest rates respectively.

Above this, senior citizen savings schemes are in demand as depositors get several benefits such as higher interest rate, tax benefits and other features as well. Any senior citizen, who is 60 or above, can avail of the benefits of Senior Citizens Savings Schemes. Among the various small savings scheme, Senior Citizens Savings Scheme offers the highest rate of interest.

For deposits maturing in seven days to 90 days, Fincare Small Finance Bank offers four per cent interest. Interest rate is six per cent for 91 days to 180 days, seven per cent for 181 days to 364 days. The bank offers eight per cent and 8.25 per cent interest for deposits maturing in 12 months to 15 months and 15 months 1 day to 18 months, respectively. FDs maturing in 18 months 1 day to 21 months will fetch 8.5 per cent interest and deposits maturing in 21 months 1 day to 24 months will give 8.75 per cent interest. Fincare Small Finance Bank offers highest interest at the rate of nine per cent on FDs maturing in 24 months 1 day to 36 months. FDs with 3 year 1 day to 5 years and 5 years 1 day to 7 years will fetch an interest rate of 8% and 7%, respectively.

Senior citizens will get 50 basis points over and above general customers. FDs with maturing period of 7 days-7 years will fetch an interest rate ranging between 4.50 per cent to 9.50 per cent.

Utkarsh Small Finance Bank latest FD interest rates for general depositors are as follows: FDs with maturity period 7 days to 45 days and 46 days to 90 days will fetch 4.75 per cent and 5.50 per cent interest, respectively. For 91 days to 180 days, the bank gives 6.75 per cent interest, for 181 days to 270 days, the bank gives seven per cent interest.

Deposits maturing in 271 days to less than one year will fetch you an interest rate of 7.25 per cent. On deposits maturing in 1 year to 455 days, the bank gives 8.20 per cent. Utkarsh Small Finance Bank offers the good interest rate on deposits maturing in 456 days to less than two years. The bank provides 8.5 per cent interest rate on deposits. On deposits maturing in two years to less than five years, the bank offers eight per cent. On five-year FDs, Utkarsh Small Finance Bank provides 8.35 per cent and 7.75 per cent interest on 5-10 years FDs.

Generally, senior citizens will get 50 basis points (bsp) when compared to the general customers. FDs maturing in 7 days to 10 years will fetch an interest rate ranging between 5.25 per cent to nine per cent.

According to latest FD rates of Suryoday Small Finance Bank, the interest rates for below Rs2 crore deposits for general public are here: For deposits maturing in 7 to 45 days, Suryoday Small Finance Bank is offering four per cent interest. For 46 days to 90 days, 91 days to 6 months, Above 6 months to 9 months, the bank is providing five per cent, 5.5 per cent and 7.5 per cent interest respectively.

The total saving deposits with PSBs and private banks in India were Rs 39.72 lakh crore as on March 31, 2019, while foreign banks had a share of Rs 58,630 crore, according to RBI data. The total deposits with scheduled commercial banks recorded a two-digit growth during the first quarter of 2019-20 financial year. The savings deposits in the domestic banking sector were Rs35.99 lakh core in 2017-18 financial years. Since 2011, private sector banks have been gaining market share over PSBs. The share of PSBs in the total deposits in Indian banking sector fell from 74.6 per cent in 2011 to 63.1 per cent in FY19. Contrary, private banks during the period gained market share of 28.7 per cent as against 18 per cent.

The author is a business journalist with 26 years of experience

Print

Number of views (360)/Comments (0)

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free