Fixed Deposits Which Are Known As Fds Getting A Lucrative Option For Investors In The Risk Off Environment And Fds Are Not Offering Banks With Leading Financial Opportunities As Stated By The State Bank Of India (SBI), HDFC, ICICI, Axis Among Others But Also By Small Finance Banks And Post Offices Across India. Fds Offer Higher Interest Rates Than Savings Bank Accounts.

The Market Earlier Had Only Two Players – Banks And Post Offices, But Now Small Finance Banks Has Also Gained A Foothold.

FD Interest Rates Of Sfbs Such As Unity Small Finance Bank, Equitas Small Finance Bank, Suryoday Small Finance Bank, Utkarsh Small Finance Bank And Jana Small Finance Bank Are Much Higher Than Those Offered By Post Offices.

"Choosing Between A Fixed Deposit In Small Finance Bank And Post Office Is A Question Of Duration Of Investment And Investment Corpus," Said Rahul Agarwal, Director Wealth Discovery/EZ Wealth. "Small Finance Banks Offer Higher Rates Than Post Office Deposits To The Tune Of 2 Per Cent To 2.5 Per Cent, However, The Small Finance Bank Fixed Deposits Are Insured By DICGC Up To A Maximum Of ₹5,00,000 Only. In Case Of Failure By Bank To Respect Deposits, A Deposit Holder Will Receive Compensation From DICGC Up To A Maximum Of ₹5 Lakhs Only, Principal And Interest Included," Agarwal Said. 

On The Other Hand, He Further Said, Post Office Fds Are Backed By Central Government Which Translates To A Considerably Low Level Of Risk. Post Office Fds Offer A Maximum Return Of 7% Which Is Available On A Tenure Of 5 Years Where As Small Finance Banks Offer Their Maximum Interest Rates On Tenures Between 2 To 3 Years. 

"Based On Above, A Good Strategy For Investors Who Value Peace Of Mind Over Returns Would Be To Invest A Sum Up To Rs. 5,00,000 In Small Finance Banks And The Rest In Post Office Fds," He Added. 

Post Office Term Deposits Give An Interest Rate Of 7.00 Per Cent To The General Public And 7.00 Per Cent To Senior Citizens On Fds Of 5 Years.