This bank offers 8.3% interest on senior citizen FDs; 7.8% interest on general FDs (2024)

With four consecutive repo rate hikes by the Reserve Bank of India (RBI) since May 2022, most of the public and private sector lenders have increased the interest rates of fixed deposits significantly in the last six months. Small finance banks (SFBs) are front runners in the race with attractive interest rates for the customers. Recently, Unity bank, a digital-first bank small finance bank has launched Shagun 366, a fixed deposit scheme that offers 7.8 per cent interest rates for deposits maturing in 366 days. Under this scheme, senior citizens can earn an 8.3 per cent interest rate for the mentioned tenure. This offer is available for the fixed deposits opened till November 30, 2022

Interest rates on FDs of different maturities
For deposits maturing between seven and 14 days, the bank offers an interest rate of 4.5 per cent. For FDs maturing between 15 and 45 days, the interest rate will be 4.75 per cent. Investors will get an interest rate of 5.25 per cent for the fixed deposits maturing between 46 and 60 days. For fixed deposits maturing between 61 and 90 days, the interest rate will be 5.50 per cent. Unity Bank will offer an interest rate of 5.75 per cent for the deposits maturing between 91 to 180 days. FDs maturing between 181 and 364 days, the interest rate will be 6.75 per cent. Investors will get an interest rate of 7.35 per cent for FDs maturing in a year.

Unity Bank will offer an interest of 7.35 per cent for FDs maturing between one year and one day and 18 months. For deposits maturing between more than 18 months and two years, the interest rate will be 7.4 per cent. The deposits maturing between more than two years and five years, the interest rate will be 7.65 per cent. Customers will get an interest rate of 7 per cent for fixed deposits maturing between five years to 10 years.

Fixed deposit interest rates offered by Unity Bank (effective from November 1, 2022)

Source: Unity Bank

Senior citizens can earn up to 8.15 per cent on FDs of other maturities
Senior citizens can earn an interest rate of 7.85 per cent for fixed deposits maturing in one year. FDs maturing between one year and one day and 18 months, the interest rate will be 7.85 per cent. Unity Bank offers an interest rate of 7.9 per cent for deposits maturing between 18 months and two years. Senior citizens can fetch an interest rate of 8.15 per cent interest for FDs maturing between more than two years and five years.

Make of note of these factors before investing
Customers can start a fixed deposit with a minimum amount of Rs 1,000. A resident individual, a senior citizen, or a member of a Hindu Undivided Family or private or public companies, partnership firms can open a fixed deposit with the Unity Bank. Do note that banks can change the interest rates of fixed deposits without any prior notice.

For premature withdrawal of fixed deposits, the banks will pay the corresponding FD interest rate minus 1 per cent for the tenure for which the deposit has been opened.

Owing to their business model, small finance banks cannot be kept on par with other scheduled commercial banks. Hence FDs from SFBs are also not comparable in terms of risk profile to full-service banks. However, when it comes to DICGC cover, do keep in mind that deposits in small finance banks are also insured by the Deposit Insurance Credit Guarantee Corporation (DICGC) to the tune of Rs 5 lakh. Most of the experts advise layman retail investors to keep their exposure limited in FDs of SFBs so that it is well within DICGC cover of Rs 5 lakh including principal and interest.

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