I opened a FD with Suryoday SFB in December 2023. This is a short blog on the process/my experience with the product It is not a paid promotion, nor will I get referral credts for referring anyone to this product
With the RBI revising rates multiple in time in Q4 2022, I was on the lookout for the best FD rates with banks, and came across this article on ET touting 9.59% on FDs. This listed Suryoday Small Finance Bank as offering high interest rates for a limited period of time (there was a special offer till December 31st 2022)
Going ahead with the deposit
I needed to reinvest some funds for one of my senior citizen family members, and I decided to go ahead with this within the Deposit Insurance and Credit Guarantee Corporation (DICGC) limit of INR 5 Lacs. I ensured that my deposit+interest would at no point exceed the insured limit. Of course, I had the ulterior motive of wanting to check out the ease of opening an FD with them. To stay within the DGCIC limit, one would need to invest 3,15,000 to ensure principal+maturity.
What was the delta we could get by going with Suryoday?
For a deposit of INR 1,00,000 (Which is the DICGC insured amount per bank) here is how the math looked for simiilar deposit tenures for the 5 year tenured deposit with cumulative interest payout
​ | HDFC Bank | SBI | SFB |
Tenure | 5 years 1 day* | 5 years 1 day* | 5 years |
Interest rate (Annualized) | 7.75% | 7.25% | 9.26% |
Interest | INR 46,817.00 | INR 43,226 | INR 58,046.80 |
* 5 years 1 day rates are higher than 5 year rates in both HDFC Bank and SFB, and to make the comparison more common-sensical, I have used them as comparisons
Is the delta worth it?
Compared to HDFC (which had higher rates than SBI), SFB would generate INR 11,229/- over 5 years per Lakh invested. For the 3.15 Lac, that difference therefore amounted to INR 35,371. Since I had the time and bandwidth to spend on this, I decided to go ahead. Also, they SFB does not require opening of an SB account as a pre-requisite for FDs. To me that was a plus point unlike several other banks which couple the two.
The actual deposit experience
First Contact: I left a message on their website. When I never heard back for well over 5 days, I then called their toll-free number. That solicited a callback within 4 hours, and after that someone from 2 nearby branches called me.
Home collection of documents: The banking staff who contacted me said they would come home to collect all relevant documents and signatures. This happened within 48 hours of calling me.
Documents nedeed: PAN,Aadhaar, colour photo and cheques for deposit
Documents to be filled: KYC, FD opening form and a form which is needed if there is a mismatch in name as per Pan vs. Aadhaar. The last document was something the bank staff had the presence of mind to bring along.
The full process of documentation for the FD took 10 mins because the staff member had called 24 hours ahead of time to notify me of documentation required.
The cheque was realized 48 hours later (as against the promised 24 hours timeframe)
There was no sign of the fixed deposit receipt within the week that the bank officer promised. Timelines were sloppily defined. However the bank officer remained responsive over whatsapp though was not able to deliver to the promised timelines . She did call me back twice in the interim to let me know that the deposit receipt was delayed from their side due to overwhelming volume of deposits for their limited time rates and that I would definitely get the receipt with the deposit period reflecting the date of cheque debit.
The cheque debit date was 14-December, the electronic FDR was generated on Jan 10 2023! The physical FD receipts were received on Jan 22 2023
The Bank officer had told me i would not get access to mobile/internet banking for opening stand-alone FDs. Turned out she was wrong! I was able to use the customer ID and register the depositor on the mobile app for SFB and it showed the FDs.
They claim that on maturity, the FD proceeds would automatically go to the bank from which we issued the cheque for the deposit. In order to test the maturity process, I deposited part of the funds in a 999 day deposit. So more on this 960 days from now:)
Final verdict
To me, a INR 35.5K delta for an effort of 15 mins (and 10 mins following up later) was worth it. However the real effort will be quantified if the deposit breaking/maturity process is also simple and seamless and that remains to be seen. I definitely appreciated the responsiveness of the staff, even though timelines were sloppy. If they enable online deposit opening/closing via aadhaar authentication or other KYC means, these options become even more attractive.
If you want regular income, then depositing the full 5 lacs is not a bad idea, since interest can be received every quarter and the deposit insure protects your principal.
Is INR 17K/Lac additional interest worth the effort to open a new FD in a different bank from your regular one?
Yes
Nope