FD rates before RBI MPC meet: These small finance banks offer 8%+ interest on fixed deposits

With the Reserve Bank of India's (RBI) upcoming Monetary Policy Committee (MPC) meeting, scheduled from  October 5 to 7, the next monetary policy decision is in focus; investors looking at fixed deposits may want to compare prevailing bank FD rates before locking in their money. Among the banks in the supplied data, several small finance banks are offering peak interest rates of 8% or more across select tenures.

AU Small Finance Bank, Equitas Small Finance Bank, ESAF Small Finance Bank, Jana Small Finance Bank, Shivalik Small Finance Bank, Suryoday Small Finance Bank and Utkarsh Small Finance Bank are among those offering rates at or above the 8% mark in their highest-rate slabs.

Small finance banks offer up to 8.25%

Suryoday Small Finance Bank has the highest peak rate among the seven banks at 8.25%, while Utkarsh Small Finance Bank offers up to 8.10%. Equitas, ESAF, Jana and Shivalik Small Finance Banks offer maximum rates of 8%, while AU Small Finance Bank offers up to 7.40% in the supplied data.

The rates show that investors seeking the highest advertised return may need to select specific tenures rather than assuming that the peak rate applies across all FD periods.

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Rates vary significantly by tenure

For Suryoday Small Finance Bank, the 8.25% rate is linked to a five-year deposit, while its three-year rate in the supplied data is 7.25%. Utkarsh offers 8.10% for a 666-day deposit, with its three-year rate at 7.50%.

This variation highlights the importance of checking the applicable tenure before comparing headline FD rates.

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How they compare with other banks

The supplied data also shows lower peak rates among several private and public sector banks. Among private banks, DCB Bank offers up to 7.50%, while Bandhan Bank offers 7.45%. In the public sector segment, Bank of India offers up to 6.85%, while Punjab & Sind Bank offers 6.85%.

For investors considering an FD around the MPC announcement, the headline rate is only one factor. The applicable tenure, premature withdrawal conditions and the bank’s deposit insurance coverage should also be checked before investing.

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