If you’re looking to grow your money safely, Fixed Deposits (FDs) are often a go-to option. Recently, Shivalik Small Finance Bank made headlines after it revised its FD interest rates, offering up to 8.80% on a 2-year FD for senior citizens. However, there’s a twist—this rate is actually lower than before.
Whether you’re a first-time investor or a seasoned saver, understanding these rate changes can help you make smarter financial decisions. In this article, we’ll break down what’s happening with Shivalik Small Finance Bank, how the revised rates compare with others, and what you can do to maximize returns on your FD.
8.80% Return on 2-Year FD
| Topic | Details |
|---|---|
| Bank | Shivalik Small Finance Bank |
| Latest FD Interest Rate | 8.30% (General), 8.80% (Senior Citizens) for 2-year FD |
| Previous Rate | 8.55% (General), 9.05% (Senior Citizens) |
| Effective From | April 9, 2025 |
| Best Alternate FD Options | Jana SFB – 8.60%, Equitas SFB – 8.75%, AU SFB – 8.25% |
| FD Type | Domestic Fixed Deposit (Amount < ₹2 Crore) |
| Who Should Consider This | Risk-averse investors, senior citizens, short- to mid-term planners |
The revised 8.80% return on Shivalik Small Finance Bank’s 2-year FD may be slightly lower than its previous offering, but it still stands strong among its peers. For senior citizens in particular, it’s one of the most rewarding fixed deposit options available in April 2025. However, always remember to compare, ladder your investments, and stay updated on changing rates. Small tweaks in planning can lead to big savings and better returns over time.
Why the 8.80% FD Rate Matters — But Also Requires a Closer Look
Shivalik SFB’s 8.80% FD return for senior citizens sounds attractive—but it’s important to note this is lower than the bank’s earlier offering of 9.05%. For general depositors, the drop is from 8.55% to 8.30%.
Why the cut? Small Finance Banks (SFBs) like Shivalik periodically revise rates based on RBI policies, liquidity conditions, and market competition. As we move through 2025, interest rate cycles are shifting, with many banks trimming FD rates due to easing inflation and stable repo rates.
see also: Canara Bank Reduced FD Interest Rates: How Much Reduction Has Been Made
What Are Small Finance Bank FDs and How Are They Different?
What is a Small Finance Bank (SFB)?
Small Finance Banks are RBI-regulated banks that offer basic banking services, including FDs, savings accounts, and loans, often targeting underserved populations. They also provide higher FD interest rates than traditional banks because:
- They have smaller lending bases
- They need to attract deposits to grow
- They often operate in rural or semi-urban areas
Are SFB FDs Safe?
Yes, up to ₹5 lakh per depositor is insured by DICGC (Deposit Insurance and Credit Guarantee Corporation), similar to any major commercial bank. However, like with any investment, it’s wise to assess the bank’s financial health and credit rating.
Detailed Interest Rate Comparison – April 2025
Here’s how Shivalik SFB stacks up against other major SFBs for 2-year FDs:
| Bank | 2-Year FD Rate (General) | Senior Citizen Rate | Interest Type |
|---|---|---|---|
| Shivalik SFB | 8.30% | 8.80% | Cumulative |
| Jana SFB | 8.10% | 8.60% | Cumulative |
| Equitas SFB | 8.25% | 8.75% | Cumulative |
| AU SFB | 7.75% | 8.25% | Cumulative |
| Fincare SFB | 8.20% | 8.70% | Cumulative |
Verdict: Despite the rate cut, Shivalik still leads in the 2-year FD category for seniors. However, Equitas SFB is a close contender, especially for long-term deposits.
How Much Will You Earn? Simple Calculation
Let’s assume you’re a senior citizen investing ₹1,00,000 for 2 years at Shivalik SFB’s 8.80% annual interest (compounded quarterly).
- Maturity Amount: ₹1,00,000 × (1 + 8.80%/4)^8
- Approximate Return: ₹1,19,020
- Net Interest Earned: ₹19,020 over 2 years
That’s almost ₹1,600 per month, without taking any market risks.
Pros & Cons of Choosing Shivalik SFB FD
Pros
- High Interest Rate even after reduction
- Ideal for short- to mid-term goals
- Senior citizens earn more (extra 0.50%)
Cons
- Rate recently reduced, could go down further
- No income tax benefit (except under Section 80C for 5-year tax-saving FD)
- Might lack brand trust compared to major public banks
Pro Tips to Maximize FD Returns
1. Ladder Your FDs
Break your lump sum into multiple FDs of varying tenures (1 year, 2 years, 3 years). It ensures liquidity and protects against rate fluctuations.
2. Compare Rates Across Banks
Use portals like BankBazaar or RBI’s official bank list to view all FD rates.
3. Submit Form 15H (for seniors)
If your annual income is below the taxable limit, submit Form 15H to avoid TDS deductions.
4. Review Interest Payout Options
Opt for monthly or quarterly payouts if you need regular income, or choose cumulative for maximum return at maturity.
see also: Get More Returns from Post Office TD than FD
8.80% Return on 2-Year FD FAQs
Q1. Is Shivalik Small Finance Bank FD safe to invest in?
Yes, deposits are insured up to ₹5 lakh by DICGC, just like other RBI-licensed banks.
Q2. Can I open an FD in Shivalik SFB online?
Yes, existing customers can open FDs via internet banking or the Shivalik mobile app. New users can also visit the nearest branch.
Q3. What is the minimum amount to open a fixed deposit in Shivalik SFB?
The minimum amount is ₹1,000. For senior citizen schemes, banks may require PAN and age proof.
Q4. Can I withdraw before maturity?
Yes, but premature withdrawal penalties apply. The rate may be reduced based on tenure completed.
Q5. Is it better to invest in SFBs than public banks like SBI or HDFC?
If you want higher returns and short-term investment, SFBs can be better. However, for long-term safety and branding, SBI/HDFC might be preferred.
