Earn interest up to 8.10% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

A fixed deposit (FD) is a secure financial instrument in which you can invest a lump sum amount. This facility is offered by banks and Non-Banking Financial Companies (NBFCs) for a fixed tenor. Over this period, you earn returns on your deposit at a fixed interest rate. An NBFC fixed deposit is also known as a corporate fixed deposit, since it is essentially offered by a company or corporate entity.  

 

Many investors consider NBFC fixed deposits as their preferred mode of investment. If you are an investor with a low tolerance for risk, you can invest in a fixed deposit plan offered by an NBFC to earn guaranteed returns on your investment. On the other hand, if you have a high tolerance for risk, you can still benefit from NBFC FDs because they make your portfolio more stable.  

 

The rates of interest on FDs offered by NBFCs are relatively higher than the rates offered on bank FDs, overall. That said, NBFC FD rates vary from one company to another. NBFC FD rates also remain unaffected by the market changes, so you can expect to get guaranteed returns. You can choose to receive your interest on a monthly, quarterly, half-yearly, or annual. Or, you can even choose to reinvest the interest in the fixed deposit and get it at maturity.

Features and Benefits of NBFC Fixed Deposits

There are many features and benefits of fixed deposits offered by NBFCs. Before you invest in this instrument, it’s advisable to get to know these details. Check them out here.

 

  • Guaranteed Returns

Fixed deposits offered by NBFCs offered guaranteed or assured returns that are unaffected by market fluctuations. This means that the risk of losing the principal amount is almost zero.

 

  • Option to Receive Regular Income

NBFC fixed deposits provide the option to receive the interest earned as a regular payout. You can make use of this facility to receive a regular income on a monthly, quarterly, half-yearly or annual basis.

 

  • Option to Avail a Loan Against FD

Most NBFC fixed deposits also give you the option to avail a certain percentage of the principal amount as a loan against FD. The interest rates on such loans are extremely nominal. 

 

  • Easy Renewal of FD

It is also extremely easy to renew an NBFC fixed deposit. In most cases, you can do this online via internet banking and continue enjoying the benefit of regular and assured returns.

 

  • Flexible Investment tenors

You can choose from a wide range of investment tenors if you wish to invest in a fixed deposit with an NBFC. The tenor options generally range from 12 months to 60 months. 

 

  • Higher Returns than Bank FDs

NBFC FD rates are typically marginally higher than the rate of returns offered on bank fixed deposits. This makes them ideal investment avenues for conservative investors looking for better returns.

 

  • Higher NBFC FD Rates for Senior Citizens

Another characteristic feature of NBFC fixed deposits is that like all FDs, they also offer higher NBFC FD interest rates for senior citizens. Typically, the rate is higher by around 0.25% for seniors. 

How are NBFC FDs Different from Bank FDs?

While fixed deposits offered by NBFCs are fundamentally similar to bank FDs in most ways, there are a few points of differences between these two categories of instruments. Let’s take a closer look at how NBFC fixed deposits differ from bank fixed deposits. 

Particulars

Bank Fixed Deposit

NBFC Fixed Deposit

Rate of Interest

Bank fixed deposits generally offer lower rates of interest.

NBFC fixed deposits offer higher rates of interest than bank FDs. 

Investment tenor

The investment tenor for bank FDs can range from 7 days to 10 years.

NBFC FDs generally come with tenor options ranging from 1 year to 5 years.

Insurance on the FD

Bank fixed deposits are insured up to ₹5 lakhs per account as per the RBI’s regulations.

NBFC fixed deposits do not come with any such insurance coverage.

Safety

Bank FDs are generally considered safer than NBFC fixed deposits.

Fixed deposits by NBFCs come with varying degrees of risks as indicated by their credit rating.

Tax Benefits

Interest on bank FDs held by senior citizens is eligible for tax deductions u/s 80TTB up to ₹50,000 per financial year.

Interest on NBFC fixed deposits does not come with any such tax benefit. 

List of NBFCs to Invest  

If you are interested in investing in fixed deposit offered by Non-Banking Financial Companies, check out some of the top NBFC FDs you can choose from. 

 

PNB Housing Finance

PNB Housing Finance is a registered housing finance company promoted by the Punjab National Bank. The bank offers an attractive fixed deposit plan that is rated FAA+/Negative rating by CRISIL and AA/Stable by CARE. Check out the rates of interest on the bank’s various FD plans below. 

Plan

Interest Rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Cumulative fixed deposit (upto ₹5 Crore)

7.00%

6.80%

7.55%

7.40%

7.40%

Non-cumulative fixed deposit (upto ₹5 Crore)

7.00%

6.80%

7.55%

7.40%

7.40%

The NBFC FD rates on PNB Housing Finance fixed deposits are higher by 0.25% per annum for senior citizens, for investments up to ₹1 Crore. 

 

Disclaimer: These are the fixed deposit rates w.e.f 7th October, 2022 and they may be subject to change at the company’s discretion. 

 

Mahindra Finance 

Mahindra Finance is a trusted vehicle financing company that has also emerged as a reliable investment provider in recent years. The company’s fixed deposit plans carry the IND AAA or stable rating, as offered by India Ratings. This NBFC offers the following FDs.

Plan

Interest Rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Dhanvruddhi cumulative (upto ₹1 Crore)

6.90%

6.90%

7.40%

NA

NA

Dhanvruddhi non-cumulative (upto ₹1 Crore)

6.90%

6.90%

7.40%

NA

NA

Samruddhi cumulative (upto ₹1 Crore)

6.25%

6.60%

7.25%

7.25%

7.25%

Samruddhi non-cumulative (upto ₹1 Crore)

6.25%

6.60%

7.25%

7.25%

7.25%

Senior citizens get NBFC FD rates that are higher by 0.25% per annum on all the above deposits. 

 

Disclaimer: These are the fixed deposit rates w.e.f 5th September, 2022 and they may be subject to change at the company’s discretion. 

 

Bajaj Finance 

India’s most diversified NBFC, Bajaj Finance also offers fixed deposits that are trusted by investors across the country. Fixed deposits from this NBFC have been awarded a safety rating of AAA or Stable by CRISIL, so you can rest assured that your investments will be safe. Check out the NBFC FD rates below.

Plan

Interest rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Cumulative fixed deposit (upto ₹5 Crore)

7.15%

7.50%

7.60%

7.60%

7.60%

Non-cumulative fixed deposit (upto ₹5 Crore)

6.93%

7.25%

7.35%

7.35%

7.35%

The NBFC FD rates on these fixed deposits offered by Bajaj Finance are higher by 0.25% per annum for senior citizens. 

Disclaimer: These are the fixed deposit rates w.e.f 20th January 2023 and they may be subject to change at the company’s discretion. 

How to Choose the Best NBFC for Fixed Deposit?

If you are planning to open an NBFC fixed deposit, here are some things to consider before you do so. 

 

  • Always compare the NBFC FD rates offered by different Non-Banking Financial Companies to identify the instrument that offers better returns. 

  • Always review the lender's credibility to ensure your fixed deposit is safe.

  • Always choose deposits that carry FAAA, MAAA or AAA ratings, depending on the agency that rated them. 

  • Before opening an FD, ensure the NBFC you choose offers a hassle-free application process and provides good customer service.

  • Choose the FD tenor wisely to avoid penalty charges for premature withdrawal.

  • If you have a surplus amount to invest, you can split it into multiple FDs with different tenors and earn interest for every deposit.

Conclusion 

An NBFC fixed deposit is a safe saving option to invest in if you are looking to earn assured interest from an investment. Different fixed deposits are available in the market. You can choose one of the best NBFC fixed deposit plans by comparing your options.

 

Also, always ensure that you choose fixed deposit plans that are rated as highly creditworthy by the credit agencies like ICRA, CRISIL and CARE to keep your capital secure. You can invest for a tenor ranging from 12 to 60 months and enjoy the benefits of attractive interest rates offered by NBFCs. If you are a senior citizen, you also get to earn additional interest, thanks to nominally higher NBFC FD rates for deposits held by people over the age of 60 years. 

FAQs about NBFC Interest Rates

  • ✔️Can I open an FD in an NBFC?

     Yes, you can open a fixed deposit in an NBFC just like how you open a bank fixed deposit. 

  • ✔️What is the NBFC interest rate on fixed deposits?

    The NBFC FD rates vary from one company to another, and they are subject to change from time to time. The interest rates are dependent on the FD amount, the investment tenor and the repo rates in the economy. Senior citizens are offered comparatively higher NBFC interest rates on deposits.  

  • ✔️Which NBFC gives the highest FD rates?

    The interest rates on fixed deposits offered by NBFCs vary from time to time, based on changes to the repo rate and the company’s internal policy. So, when it comes to deciding which Non-Banking Financial Company gives the best returns on fixed deposits, different NBFCs may hold the top spot on the list at different points in time. You can check out which NBFC offers the highest fixed deposit rates by comparing your options online. 

  • ✔️How does an NBFC decide the interest rate on fixed deposits?

    NBFCs decide the interest rate on their fixed deposits based on various factors like their profitability, internal policies, repo rates and more. That said, NBFC FD rates cannot exceed the ceiling rate set by the Reserve Bank of India.

  • ✔️What is the current rate of interest offered by NBFC?

    The rate of interest on NBFC fixed deposits varies from one company to another. They also change based on the tenor and the amount of the deposit made.

  • ✔️Is interest from NBFC fixed deposits taxable?

    Yes, the interest you earn from your NBFC fixed deposit is taxable as income from other sources.