AU Small Finance Bank launches its first Green FD: All you need to know

If you are an ESG-conscious investor,  AU Small Finance Bank (AU SFB) on Wednesday launched its first Green Fixed Deposit (FD) called ‘Planet First – AU Green Fixed Deposit’ to support renewable and green projects like solar power, electric vehicles etc.
 

The SFB joins the likes of HDFC Bank, Federal Bank, IndusInd Bank, Union Bank, and DBS Bank in offering Green FDs. On the face of it, a green deposit works just like a normal fixed deposit. It pays interest to deposit holders and comes with a fixed tenure. However, proceedings from deposits get earmarked for allocation to green finance, supporting renewable and green projects. 

Notably, the Planet First - AU Green Fixed Deposit offers an interest rate of up to 8.50 per cent, with a minimum investment requirement of only Rs 5,000.  Deposits of up to Rs 5 lakh are insured under Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.

Both existing and new customers of AU SFB can open their Green FD accounts through Video Banking, the AU 0101 App, NetBanking, or by visiting their nearest AU Small Finance Bank branches.

Earlier in June, the Reserve Bank of India (RBI) came out with the Framework for acceptance of Green Deposits to enhance transparency and ensure that the money is used for its intended cause.

As per the framework, regulated entities (REs) offering Green FDs shall be required to allocate the proceeds raised through green deposits towards green activities/projects which encourage energy efficiency in resource utilisation, reduce carbon emissions and greenhouse gases, promote climate resilience and/or adaptation and value and improve natural ecosystems and biodiversity.

“The Reserve Bank of India (RBI) is among the first few global regulators to introduce a green deposit framework. Now, we are taking an even greater step forward and will be among the first few banks to launch 'Planet First – AU Green Fixed Deposit,' fully compliant with the new RBI framework,” said Sanjay Agarwal, Founder and MD & CEO, AU Small Finance Bank. Adding that by choosing the FD, one joins a community of pro-green customers. 

The bank said the AU Green Fixed Deposit is designed to allocate its entire proceeds to support renewable and green projects including waste management, solar projects, plastic recycling, rainwater harvesting, and electric vehicles.
 

Notably, the banks said funds will be utilised pan-India with few focus areas being green projects in “Rural Bharat”.

Here are a few notable features of the Planet First - AU Green Fixed Deposit: 

• The Green Fixed Deposit offers an interest rate of up to 8.50 per cent, with a minimum investment requirement of Rs 5,000. 
• Customers can opt for tenures spanning from two years to five years-term options. 
• The FD offers a variety of interest payment choices to customers, including monthly, quarterly, and cumulative (at maturity), to help manage their cash flows effectively. 
• The bank said customers will receive regular updates regarding the utilisation of their funds and the progress of the green projects supported by Pl
  AU SBF FD Rates

AU SBF FD Rates

AU SBF FD Rates

anet First - AU Green Fixed Deposit.