Deposits rise in small banksImage credit source: Freepik
Today, everyone from the country’s big commercial banks like SBI and HDFC Bank to the RBI Governor and Finance Minister is worried about the continuous decline in bank deposits. While on the other hand, small finance banks are enjoying the deposits. People’s deposits in FDs in small banks are continuously increasing. After all, what is the reason for this?
One important reason for this is that small financial banks generally give people 8 percent interest on FDs. That is why people prefer to keep their money in small financial banks. There are many other reasons for increasing deposits in small financial banks…
interest up to 9%
There are more than half a dozen small finance banks in the country that offer 100-125 basis points more interest on fixed deposits than SBI or HDFC Bank. While senior citizens get 9 per cent or more interest on FD. Deposits in investment tools like FD are also made mostly by senior citizens. That is why these banks are getting good deposits.
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If we take it as an example, Utkarsh Small Finance Bank and Suryoday Small Finance Bank offer 8.5 percent interest on FDs of 2 to 3 years. Whereas, Equitas Small Finance Bank offers 8.5 percent interest only on FDs of less than 3 years. Whereas, Unity Small Finance Bank gives 9 percent interest on FDs of only 1,001 days.
In contrast, special FD schemes like Amat Kalash at SBI or HDFC Bank offer a maximum interest rate of only 7.1 to 7.4 per cent.
These facilities are also available
Another reason for the growth of deposits in small finance banks as compared to big banks is the facilities they offer to customers. These banks provide many services like home visits by staff and FD investments to individuals without opening an account at low and reasonable charges. That is why people are showing interest in increasing their deposits in these small finance banks.
