Fixed deposits have been considered one of the safest savings options in India historically. This is true across issuers including Non-Banking Financial companies (NBFC) which generally offer a higher interest rate on FDs than traditional banks and post offices. Higher repo rates over the past few years have resulted in a higher interest rate on NBFC FDs. Even though the attractive interest rates are one of the first things to catch an investor’s eye, this should not be the only factor to consider while choosing the right NBFC fixed deposit. You have to take into account the safety rating and credentials of the NBFC also.
We have listed down a few NBFCs that offer a high interest rate on FDs and have good safety ratings to make your savings decision easier:
NBFCs and their respective FD interest rates
|NBFC||Safety Ratings||Non-senior Citizen Interest Rates||Senior Citizen Interest Rates|
|LIC Housing Finance Limited||CRISIL-AAA/Stable||6.80%-7.50% p.a||7.25-7.75% p.a|
|Bajaj Finance Limited||CRISIL-AAA/Stable ICRA-AAA (Stable)||7.11%-7.95% p.a||7.35%-8.20% p.a|
|PNB Housing Finance Limited||CRISIL-AA/Stable CARE-AA/Stable||6.79%-7.70% p.a||7.04%-7.95% p.a|
|Mahindra Finance||CRISIL-AAA/Stable||7.05%-7.75% p.a||7.30%-8.00% p.a|
|Shriram Finance Limited||CRISIL-FAAA ICRA-MAA+||7.34%-8.18% p.a||7.84%-8.68% p.a|
Note: The above-mentioned NBFCs are not ranked in any particular order and the interest rates mentioned here are as of 11th April, 2023.
LIC Housing Finance Limited
LIC HFL offers fixed deposits under the ‘Sanchay Deposit’ brand name. The interest rates for this FD range from 6.80%-7.50% p.a for non-senior citizens and 7.25-7.75% p.a for senior citizens on tenors ranging from 1-5 years. The minimum deposit amount is ₹20,000 for cumulative FDs and ₹2 Lakhs for non-cumulative monthly payout FD.
They provide auto-renewal facility through which the NBFC will automatically renew the FD when it matures. This way you will not lose out on the interest even if you forget to withdraw the money when it matures.
Bajaj Finance Limited
Bajaj Finance Limited offers fixed deposit interest rates of 7.11%-7.95% p.a to non-senior citizens and 7.35%-8.20% p.a to senior citizens for tenors ranging from 1-5 years. Non residents of India (NRI) can also book Bajaj Finance fixed deposits. The minimum deposit amount is ₹25,000. Senior citizens get an additional 0.25% p.a interest rate on FDs over the base rate.
Premature withdrawal facility can be opted after the lock-in period of three months. There is no penalty if you withdraw the Bajaj Finance fixed deposit after the initial lock-in period but before six months from the date of deposit.
PNB Housing Finance Limited
PNB HFL offers fixed deposit interest rates of 6.79%-7.70% p.a to non-senior citizens and 7.04%-7.95% p.a to senior citizens for tenors that range from 1-10 years. It has a safety rating of AA/Stable rating from both CRISIL and CARE. According to CRISIL, AA suggests high chances of principal and timely interest payment by the NBFC. The minimum deposit amount is ₹10,000 for cumulative fixed deposits and ₹25,000 for non-cumulative monthly payout FD and ₹10,000 for other schemes.
With PNB HFL fixed deposits, you can open a joint fixed account account with up to three joint holders. The FDs can be withdrawn prematurely after the compulsory lock-in period of three months. That being said, the interest rate charged will be lesser than the agreed upon FD interest rate.
Mahindra Finance offers fixed deposit interest rates of 7.05%-7.75% p.a to non-senior citizens and 7.30%-8.00% p.a to senior citizens on tenors that range from 1-5 years. They have been accredited with a credit rating of AAA/Stable by CRISIL and India ratings. AAA rating indicates very high safety with low credit risk for the depositors. They have four FD schemes, namely Samruddhi cumulative scheme, Samruddhi non-cumulative scheme, Dhanvruddhi cumulative scheme and Dhanvruddhi non-cumulative scheme. The Dhanvruddhi scheme can be opened through online mode only whereas the Samruddhi scheme can be opened via online as well as physical mode.
Shriram Finance Limited
They offer interest rates on fixed deposits of 7.34%-8.18% p.a to non-senior citizens and 7.84%-8.68% p.a to senior citizens on tenors ranging from 1-5 years. Women and senior citizens get an additional 0.10% and 0.50% p.a interest rate on FDs respectively over the base rate. They provide flexible payout options that include monthly, quarterly, half-yearly, annual and at maturity options.
The minimum deposit amount is ₹5,000 for cumulative as well as non-cumulative fixed deposits. Auto-renewal and nomination facility is provided by the NBFC. An additional 0.25% p.a interest rate will be provided for fixed deposits that have been renewed after maturity.
FIxed deposits makes sure that your capital is safe and provides assured returns as it is not market-linked. When it comes to FDs, market volatility does not affect your returns. Even if the interest that you receive from an FD are nominal compared to other dynamic investments, they are a great addition to your portfolio as it spreads risk. When you are planning your savings, it is important to take into account your own financial goals. Before choosing an NBFC fixed deposit, make sure you thoroughly research and choose an FD scheme that aligns with your financial goals.