Curated By: Business Desk
Last Updated: September 27, 2023, 13:27 IST
In the world of banking and finance, fixed deposits (FDs) are always known as one of the most secure ways of investing. They have a fixed interest rate over a specific period with assured returns. However, one of the biggest disadvantages of FDs is their lack of flexibility. Once the money goes in, it becomes difficult to take it out without conditions. On the other hand, savings accounts do give free access to funds but they offer very low interest rates.
But now, there have been reports that many private banks are offering savings accounts with interest rates similar to FDs. As per reports, this is because there is an increase in demand for loans due to the holiday season, which has led to a shortage of money in the market.
According to reports, private banks are offering an interest rate of more than 7 per cent to keep the money in their savings accounts. This interest rate is similar to that of FDs, which offer a rate between 7 to 9 per cent. Usually, savings accounts have a very small interest rate, between 2 and 2.5 per cent. But this move is expected to encourage a lot of people to open their savings accounts.
However, these private banks have certain conditions that their customers need to fulfil. For example, Ujjivan Small Finance Bank is offering interest rates of up to 7.50 per cent on its Maxima Savings Account but the account holder will have to deposit at least Rs 1 lakh in the account.
Another bank named DCB Bank is also offering interest of up to 7.75 per cent on savings accounts with different deposits. But they want the deposit amount to be between Rs 10 lakh and Rs 1 crore. Jana Small Finance Bank is also offering interest between 3.50 per cent and 7.50 per cent on various types of deposits.
Apart from that, Unity Small Finance Bank has been offering different interest rates for different amounts. The rate for deposits above Rs 1 lakh is 7 per cent per annum, and for deposits up to Rs 1 lakh, it is 6 per cent. Equitas Small Finance Bank is offering 3.50 per cent interest on account balances of up to Rs 1 lakh, 5.25 per cent interest on balances above Rs 1 lakh to Rs 5 lakh, and 7 per cent interest on balances above Rs 5 lakh.
The financial advisors have advised investors to properly check the websites of these private banks before making an investment, as they keep changing their interest rates frequently.