3 Banks That Offer Over 8% Interest Rates On Up To 1 Year FDs

Fixed Deposits (FDs) have come out as one of the best investment destinations for safe and secure returns all thanks to the high-interest rates offered by the banks, particularly Small Finance Banks (SFBs). FDs stand out as a shrewd decision since they give investors a safe way to minimise market volatility while embracing the accessibility and convenience of digital banking. SFB offers the highest interest rates among all banks whether private or public.

Here we have listed 3 banks that offer the highest interest rates, more than 8% on a deposit period of 1 year or less.

1. Ujjivan Small Finance Bank (USFB)

Ujjivan Small Finance Bank (USFB) offers interest rates between 3.75% to 8.25% to general customers on amounts below Rs 2 Crore. Senior citizens can earn 0.50% additional interest rates on their deposits. The bank offers an interest rate of 8.25% on one-year and 500 days deposits to general customers. While for the same period, senior citizens can get 8.75% on their deposits. This interest rate makes USFB one of the highest interest-paying banks on 1 Year deposits.
The bank allows monthly, quarterly, and at-maturity interest pay-out options to customers. The new rates are effective from June 01, 2023, according to the bank's official website.

2. ESAF Small Finance Bank

ESAF Small Finance Bank offers interest rates on Fixed Deposits between 4% to 8.50% to the general public and 4.50% to 9% to senior citizens. The interest rates are applicable on amounts below Rs 2 Crore for the deposit period that ranges between 7 days to 10 years.

The bank offers 9% interest rate to senior citizens on FDs with maturity periods of 2 to 3 years, while 8.50% interest rate on deposit periods of 1 year 1 day to less than 2 years. While for the deposit of 2 years to less than 3 years, the bank offers 8.50% interest to the general public and for deposit periods of 1 year 1 day to less than 2 years, the bank offers 8% interest rates. ESAF Small Finance Bank raised its interest fees on FDs of under Rs 2 crore on April 04, 2023.

3. Unity Small Finance Bank (UDFB)

Unity Small Finance Bank (UDFB) is a new Small Finance Bank that recently joined the high-interest rate race. The bank hiked its FDs interest rates on June 14, 2023. The bank offers interest rates on FDs between 4.50% to 9% to the general public, and interest rates between 4.50% to 9.50% to senior citizens. The rates are applicable on the deposit period of 7 days to 10 years on amounts below 2 Crore.

The bank is offering a maximum 9.50% interest rate to senior citizens and maximum 9% interest rate to the general public on a special deposit of 1001 days. While on deposit periods of 501 days and more than 6 months to 201 days, the bank offers maximum 8.75% interest to the general public and 9.25% interest to Senior Citizens.

According to the bank, Unity Bank offers savings account holders an interest rate of 7% for deposits over Rs 1 lakh and 6% for deposits under Rs 1 lakh.

Should invest in Small Finance Bank?

Small finance banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a specialised division of RBI which is under the jurisdiction of the Ministry of Finance, Government of India. This insurance covers all deposits, including savings, fixed, recurring, etc. For both principal and interest sums held in the same right and capacity, each depositor in a bank is insured up to Rs 5,00,000.