Small finance bank FD rates compared: Suryoday, Jana, Ujjivan, Equitas, AU on key tenures

Livemint has published a side-by-side comparison of fixed deposit rates offered by five small finance banks: Suryoday, Jana, Ujjivan, Equitas and AU. According to the reporting, the comparison covers key tenures. For savers, the takeaway is that small finance banks generally pay more than large lenders on FDs, but the best rate depends on the tenure you pick, your age and how much you deposit.

The article is a useful starting point, not a buying instruction. Rates are set by each bank and change often, so confirm the current card rate with the bank before you book. This piece explains how to read such a comparison, what the extra yield costs you in risk and tax, and how to choose a tenure. It deliberately does not repeat specific rate figures we cannot verify; for the numbers, refer to the original report and to the bank's own rate page. You can also track wider movements on our interest rates page.

Key takeaways

• Livemint compared FD rates at Suryoday, Jana, Ujjivan, Equitas and AU small finance banks across key tenures, as reported.
• Small finance banks have usually offered higher FD rates than large banks, because they compete harder for deposits.
• Deposit insurance covers up to ₹5 lakh per depositor per bank, principal and interest combined, so spreading money matters more than chasing the top rate.
• The best tenure differs by bank; the highest rate is often on a specific mid-length tenure rather than the longest one.
• Interest is taxable at your slab rate, and TDS applies once interest crosses the annual threshold at a bank.
• Compare the after-tax return and the premature withdrawal terms, not only the headline percentage.

What the Livemint comparison covers

According to the report, the five banks are compared for key tenures. That phrase normally means the durations most savers actually choose, such as one year, two years, three years and five years. Such tables are helpful because a bank that leads on one tenure often trails on another. A bank might push a particular maturity because it needs funding for that horizon, so its rate for that slot can stand out while its other slots look ordinary.

The headline does not tell us the ranking, the gap between banks or the rates for senior citizens, and we will not guess them. What we can say from standing knowledge is that small finance banks are RBI-regulated scheduled banks, that they price deposits above the large-bank band to attract savers, and that a rate card can be revised at short notice.

Why small finance banks pay more on fixed deposits

Small finance banks were created to serve segments that larger banks reach less, such as small businesses, microfinance borrowers and low-income households. Their loans tend to carry higher yields, and they have a smaller retail deposit base than the biggest banks. To raise deposits they offer higher rates, and to keep their cost of funds manageable they often concentrate the best rates on particular tenures.

That business model explains both the higher rate and the trade-off. Loan books skewed towards unsecured or small-ticket lending can be more sensitive to economic stress than a large diversified bank. This does not mean the deposits are unsafe, since these are regulated banks and covered by deposit insurance, but it is the reason the extra yield exists. Higher return and slightly higher institutional risk normally travel together.

How to read a rate comparison table

A table of five banks is easy to misread. Use this checklist before you act on it:

1. Check the date. A rate table is a snapshot, and banks revise rates without notice.
2. Check the tenure precisely. A rate quoted for a period such as 400 days is not the same as one for exactly one year.
3. Check the customer category. Senior citizens usually get an additional premium, so a senior table and a general table are not comparable.
4. Check the payout type. Cumulative deposits compound the interest; monthly or quarterly payout deposits pay it out and earn less over time.
5. Check the amount slab. Some banks quote different rates for deposits below and above a threshold.

What a higher rate is worth: worked examples

The rates below are hypothetical, chosen only to show how the arithmetic works. They are not the rates of any of the five banks. They assume quarterly compounding on a cumulative deposit.

Deposit	Tenure	Hypothetical rate	Approximate maturity value	Interest earned
₹1,00,000	1 year	7.0%	₹1,07,186	₹7,186
₹1,00,000	1 year	7.5%	₹1,07,713	₹7,713
₹1,00,000	1 year	8.0%	₹1,08,243	₹8,243
₹5,00,000	3 years	7.0%	₹6,15,720	₹1,15,720
₹5,00,000	3 years	7.5%	₹6,24,850	₹1,24,850

Two lessons come out of this. First, half a percentage point on ₹1 lakh for a year is only about ₹500 to ₹530. The gap becomes meaningful only with a larger amount or a longer tenure: on ₹5 lakh for three years, the same 0.5 point difference is roughly ₹9,100. Second, compounding helps at longer tenures, so a cumulative deposit usually beats a payout deposit at the same headline rate.

Safety first: deposit insurance and concentration

Deposits in scheduled banks, including small finance banks, are insured by the Deposit Insurance and Credit Guarantee Corporation up to ₹5 lakh per depositor per bank. The cover includes both principal and accrued interest, and it applies across all your accounts in the same bank in the same capacity. It does not apply per account, so opening five FDs in one bank does not give you five covers.

The practical rule is to keep your total exposure to any one small finance bank within the insured amount, unless you are comfortable with the extra risk. If you have ₹15 lakh to invest, splitting it across three banks lets you keep every rupee inside the cover and still earn the higher rates. Joint accounts and different holding patterns have their own cover, so the rule of thumb is to check how the bank records ownership.

Tax on FD interest and the real return

FD interest is added to your income and taxed at your slab rate. Banks deduct TDS when interest at a bank crosses the annual threshold: ₹50,000 for most depositors and ₹1,00,000 for senior citizens. If your income is below the taxable limit, you can submit the relevant declaration form to avoid TDS. If TDS is deducted, you can claim credit for it when you file your return.

The after-tax return is what you actually keep. The table below shows how a hypothetical 8% pre-tax yield shrinks by tax bracket, using the effective rates including cess.

Your tax bracket	Effective tax on interest	Pre-tax yield	Approximate post-tax yield
No tax payable	0%	8.0%	8.0%
20% slab	20.8%	8.0%	6.3%
30% slab	31.2%	8.0%	5.5%

For a saver in the top bracket, the after-tax difference between banks narrows noticeably. This is why the higher small finance bank rate is most attractive for retirees, homemakers and others in low or nil tax brackets.

What to do now: a step-by-step approach

If you have money to place in a fixed deposit, work through these steps:

1. Decide your time horizon first and match the tenure to when you will need the money.
2. Pull the current rate card from each bank you are considering, for your customer category.
3. Compute the maturity value for your amount, or use a simple calculator, and compare after-tax returns.
4. Cap your exposure at each bank to the insured limit unless you accept the extra risk.
5. Read the premature withdrawal clause. Penalties usually reduce the rate by a fraction of a percent, and some tenures are not withdrawable early.
6. Consider laddering: split the money across maturities so part of it becomes available every year.

If you also carry expensive debt, note that paying it off can beat any FD. A personal loan at double-digit interest costs far more than an FD earns, so see our personal loan guides before parking cash in a deposit while paying a high EMI. For more stories like this one, visit the news hub.

Common mistakes savers make with FD comparisons

• Chasing the top rate with the entire amount, ignoring the ₹5 lakh insurance limit.
• Comparing a senior citizen rate at one bank with a general rate at another.
• Ignoring the compounding or payout frequency, which changes the true return.
• Booking a long tenure when rates may be higher later, or a short tenure when rates may be falling; nobody can time this reliably, so laddering is safer.
• Forgetting tax and TDS, which reduce the return for higher-bracket savers.
• Breaking an existing FD early to move to a higher rate without counting the penalty.

Frequently asked questions

Which small finance bank has the highest FD rate?

According to Livemint's comparison, the five banks are Suryoday, Jana, Ujjivan, Equitas and AU, compared across key tenures. The leader differs by tenure and changes when banks revise rates, so check each bank's current rate card for your tenure and customer category before booking.

Are FDs in small finance banks safe?

Small finance banks are RBI-regulated banks, and their deposits are insured by DICGC up to ₹5 lakh per depositor per bank, including interest. Beyond that limit, your money depends on the bank's own health, so spreading large sums across banks is sensible.

Should I break my existing FD to move to a higher rate?

Usually not. Premature withdrawal penalties and the loss of accrued compounding can cancel out the gain. It is generally better to direct new money or maturing deposits to the better rate.

Is the interest on these FDs taxable?

Yes. FD interest is taxed at your slab rate, and the bank deducts TDS once your interest at that bank crosses the annual threshold. Depositors with no tax liability can submit a declaration to avoid TDS, subject to the rules.