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Do Smaller Banks Give Higher FD Rates

Yes, in today’s competitive world, smaller banks, in a bid to get more customers to trust them offer a higher rate of interest in FDs to their customers. Since even a fraction could largey affect the total amount you receive at the end of your tenure, people tend to go with a smaller bank to earn that extra amount.



Here are Some Aspects to Check Before you Invested:

Presence of a Smaller Network- As they have a smaller network they offer something which attracts customers to them. By offering higher interest rate they try to achieve just that. Higher customer leads to higher cash flow and both are benefited.

What are the Risks with Investing in Smaller Banks – you can claim deposit insurance for up to 1 lakh if the bank you invested in goes into loss and decides to liquidate itself. That makes FDs risk free to a greater extent.  There are lots of the more reasons why smaller banks gives higher FD rates.

Other things to Check - High interest rates are not the only things to check. Other aspects could be the number of branches the bank you chose has and what is the level of customer satisfaction. These may be important if you want to avoid inconvenience or losses later.

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