North East Small Finance Bank (NESFB) has announced the launch of its enhanced fixed deposit (FD) schemes. Currently, the lender is offering up to 8.50% rate for the general public and 9.25% for senior citizens. It must be noted that senior citizens are generally offered higher rates on FDs by any lender.
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Here are the latest FD rates offered by North East Small Finance Bank:
| Tenure | Regular Citizen up to ₹5 crore (Interest rate) | Senior citizen (Interest rate) |
| 366 - 1095 Days | 7.75% | 8.50% |
| 400 days- Special Scheme | 8.40% | 9.15% |
| 555 days- Special Scheme | 8.50% | 9.25% |
| 1111 Days- Special Scheme | 8.50% | 9.25% |
(Source: North East Small Finance Bank)
Considering other small finance banks as well, the prevailing interest rates for higher fixed deposits range from 8% to 9.5%
Among them, Unity Small Finance Bank stands out with a 9.50% interest rate for a 1001-day tenure. Fincare Small Finance Bank closely follows at 9.21% for a 750-day FD.
Jana Small Finance Bank also offer rates at 9.00% for 365 days.
Generally, fixed deposits (FDs) offered by small finance banks are considered safe, but like any financial product, they come with their own set of risks.
Here are some points to consider regarding the safety of FDs offered by small finance banks:
Regulation and compliance
Small finance banks are regulated by the Reserve Bank of India (RBI), ensuring they adhere to certain regulatory standards and guidelines.
This oversight helps to maintain the stability and integrity of these banks, contributing to the safety of their FD offerings.
Deposit insurance
FDs offered by small finance banks are typically covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to a certain limit.
This insurance provides an additional layer of security for depositors, safeguarding their investments in case of bank failure.
Credit ratings
Before investing in an FD offered by a small finance bank, it's advisable to check the bank's credit ratings.
Credit rating agencies assess the financial strength and stability of banks, providing insight into their ability to honour their financial obligations, including FD repayments.
A higher credit rating indicates greater reliability and stability.
Market reputation
Investors should consider the reputation and track record of the small finance bank.
Banks with a solid reputation for reliability, transparency, and customer service are generally safer options for FD investments.
Interest rates vs risk
Higher interest rates offered by small finance banks may sometimes indicate higher risks associated with their FDs.
While attractive interest rates can enhance returns, depositors should carefully evaluate the trade-off between returns and risk, ensuring that they are comfortable with the level of risk involved.
Diversification
It's advisable not to put all the savings into FDs from a single small finance bank.
Diversifying investments across multiple banks can mitigate the risk of loss in case of any adverse events affecting a particular bank.
(Edited by : Amrita)
First Published: Mar 19, 2024 12:03 PM IST
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