Small finance banks may be niche banks, catering to a small section of customers, but the interest rates that they offer on savings bank accounts are much higher than larger peers. Consider this: large banks like State Bank of India (SBI), HDFC Bank and ICICI Bank offer between 3.5 per cent and 4 per cent on savings account deposits. But small finance banks like Jana Small Finance Bank, ESAF Small Finance Bank and North East Small Finance Bank offer up to 7 per cent on savings account deposits.
Why small finance banks offer higher interest rates than mainstream banks:
Small finance banks offer high interest rates on recurring deposits and fixed deposits as well. Their RD and FD interest rates are much higher than banks like SBI and other peers.
Small finance banks are relatively new as compared to the mainstream banks. Thus, with high interest rates they try to woo maximum customers, say experts. They also offer door-step services for the convenience of their customers.
Given below are savings account interest rates of Jana, ESAF and North East small finance banks:
Savings account interest rates of Jana Small finance Bank:
Jana Small finance Bank offers an annual return of 6 per cent on savings bank deposits, according to janabank.com.
Savings account interest rates of ESAF Small Finance Bank:
On deposits up to Rs 1 lakh, ESAF Small Finance Bank offers an interest rate of is 4 per cent per annum, according to esafbank.com. On deposits above Rs 1 lakh and up to Rs 10 lakh (i.e for incremental amount above Rs 1 lakh only), ESAF offers an annual interest rate of 6.50 per cent. ESAF offers an interest at the rate of 7 per cent per annum, on deposits above Rs 10 lakh (i.e for incremental amount above Rs 10 lakh only).
Savings account interest rates of North East Small Finance Bank:
North East Small Finance Bank offers an interest of 6 per cent per annum on savings account deposits up to 1 lakh. On deposits above Rs 1 lakh, the savings account interest rate offered is 6.25 per cent per annum, according to nesfb.com.