Small Finance Banks Offer High FD Rates, But Diversification Matters

Some small finance banks are offering high interest rates on fixed deposits.

Suryoday Small Finance Bank has the highest listed rate, at 8.25% for general citizens and 8.50% for senior citizens.

Other banks also offer competitive rates.

However, the highest rate may require keeping money locked away for longer.

That can be a problem if someone needs the money quickly.

An expert identified as Jain recommends comparing the bank, tenure and personal savings needs.

Investors can spread deposits across different banks and use different tenures.

Deposits are insured up to Rs 5 lakh per depositor per bank by the Deposit Insurance and Credit Guarantee Corporation.

Booking fixed deposits in stages can also provide more flexibility.