What are Small Finance banks?
Small Finance Banks is a specific segment of banking created by RBI under the guidance of Government of India with an objective of furthering financial inclusion by primarily undertaking basic banking activities to un-served and under-served sections including small business units, small and marginal farmers, micro and small industries and unorganized entities. Like other commercial banks, these banks can undertake all basic banking activities including lending and taking deposits.
After Covid-19 pandemic all Public sector banks and Private banks have reduced their interest rates on FD’s drastically, hence senior citizens and others who depend on earnings from FD’s interest are facing lots of problems.
They are looking for an alternate option to invest and earn higher interest rates, For them these Small fiance banks may be a good option.
Which Small Finance Bank is offering Highest Interest Rate
In below table we have listed some good Small Finance banks and compared their interest rates.
Disclaimer: Data as on respective banks’ websites on March 26, 2021.
Is Small Finance Bank Is Safe to Invest?
If you are placing deposits in small finance banks, they are insured by the Deposit Insurance Credit Guarantee Corporation (DICGC) to the tune of Rs 5 lakhs. The DICGC not only insures deposits, but, also savings, current, recurring deposits etc. So, to the extent of Rs 5 lakhs the deposits are insured.