Fixed deposit has been the most popular method of saving many individual like to open a fixed deposit with bank to create wealth for themselves. There was a time when searching for best interest among banks was a concern. However the technology advancement allows people to search the interest rate of different banks through the internet. But then again moat of the banks were not reachable. It generally happens that many small banks in I dia were offering higher rate of interest on Fixed deposit over others. But their set up is not in far flung areas. But now seems the new FD option through the Phone Pe UPI apps minimizes this problem.
Fixed deposits (FDs) are popular because they offer guaranteed returns, complete capital safety free from market risks, and a very simple account opening process. Small banks and small finance banks offer higher interest rates on deposits (like fixed deposits) to aggressively attract customers, build a reliable funding base, and compete with large, established banks that already enjoy deep public trust and cheap pools of money. Offering higher rates acts as a marketing tool to convince people to move money away from big legacy banks and trust a newer or smaller institution. I often prefer to make deposits in these small bank to see my money doubling in quick time. In this competitive phase getting a higher rate of interest is very challenging. Currently most of the established banks in India is offering ROI of 6% to 6.5%, however at the same time many small bank were offering #FD at 7.5% to 8.1%. The difference is above 1% which is enough to get some healthy return on your investment.
There is always a challenge for small investor to locate these bank. Mostly these have limited network and they are established in small town and cities or may be somewhere in big cities. Reaching out to them was a big challenge. But seems the hassle has ended through online mode of #FD. Phone Pe has made the fixed deposits in these bank easier through their own platform.
PhonePe is an Indian digital payments and financial services app that lets you send and receive money, pay utility bills, and shop using the Unified Payments Interface (UPI). It links directly to your bank account for instant, cash-free transactions
The app is not limited to financial transaction but expanded their scope to mutual fund investment to buying digital gold. The platform has now introduced their FIxed deposit scheme too and one easily secured a good return by availing their option. This #upi apps is very popular in India and now they have introduced the fixed deposit which can prove boon to many investor looking to invest in small bank to earn higher rate of interest. The user can easily open a fixed deposit on any bank through their platform and avail good #roi on their idle fund. The platform offer the tenure option too to avail the better rate of interest. I was surprised to see the option yesterday and quickly open a small fixed deposit for a tenure of 1 Year 6 Month. It offered me a lucrative interes of 8.1%
(Phone pe screenshot)
This option let the individual to reach out the small bank and get the benefit of higher rate of interest. There is no paper work required. The phone pe app user have their account verified through government id's and phone number. The user banks were linked to the app. There is not hassle to create the online FD. Wondering if that would be secure or not then, I like to make it clear that all the small fixed deposit are secured. In India, small finance banks are regulated by the Reserve Bank of India (RBI), and deposits up to ₹5 lakh per bank per depositor are protected by DICGC insurance.
I believe the Phone Pe app is providing a unique opportunity to various individual to avail the higher rate of interest. They can earn without opening a bank account in the small bank. A boon and will be interested to look ahead, how the scheme helps the bank to grow and customer too.
In good faith - Peace!!
