Why You should Choose Fixed Deposits From NBFCs?

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August 12th, 2018   |   Updated on August 21st, 2018

NBFCs or Non-Banking Financial Companies are institutions that offer financial services. They engage in the business of loans and investments and are registered under the Companies Act of 1956. For many individuals, a bank FD is one of the safest investments.

However, NBFCs offer higher returns as compared to other financial institutions. Therefore, it makes sense for you to pick an FD from an NBFC instead.

How to Get Together Funds

You can always check your returns using an FD calculator, a tool that allows you to know the maturity amount by entering the investment amount, tenor and the FD interest rate. This way you can also compare the returns offered by banks and NBFCs, and see how an FD from the latter will benefit you more.

Here are some of the reasons why you should choose an FD from an NBFC instead of a bank.

Higher returns

For most part, FD interest rates offered by banks range from 6–7% per annum. On the other hand, FDs from NBFCs offer more than 8% interest on your investment per annum. A trusted NBFC such as Bajaj Finance for instance, helps your Fixed Deposit investment to grow by giving you a high interest rate of up to 8.75%.

This is not only higher than what most banks and NBFC offer, but is also 200 basis points higher than the 6.4% interest rate that comes most savings accounts. This makes it an obvious addition to your investment portfolio, whether you’re an experienced investor or a novice.

High stability and credibility rating

Fixed deposits are secure investment options as they aren’t linked to market fluctuations. However, when you choose an FD you should also check its rating to ensure that the issuer is reliable.

Checking ICRA and CRISIL ratings will give you the most clarity regarding if the issuer is prompt and reliable. For instance, you can completely FDs from Bajaj Finance as they carry ICRA’s MAAA (stable) rating and CRISIL’s FAAA/Stable rating.

Flexibility with regards to investment amount

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Another factor that gives FDs from NBFCs an edge is the minimum amount that you must investment. Here, you can invest as per your budget and preference. For example, Bajaj Finance allows you to invest as little as Rs. 25,000.


Flexible tenor options

You can choose flexible tenor options of 12–60 months for both cumulative and non-cumulative NBFC FDs based on your financial needs and preferences.

Here, the only difference is that in case of cumulative FDs, you get to access your interest on your investment at the time of the FD’s maturity.

On the other hand, in case of non-cumulative FDs, you can access interest payouts at regular intervals of your choice, all through the tenor.

Ease of application

To avoid the hassle of calculating your maturity amount manually, NBFCs offer an online FD calculator that is free and easy to use. You can enter your FD amount along with the FD interest rate and the tenor that you have in mind.

The FD calculator will automatically display the returns you will earn. Thereafter, on deciding on the amount, you can instantly apply for an FD online by filling a simple application form, and request doorstep document pick-up.

This saves you a lot of time and effort, and makes investing easy. Once your investment is active, you can also access the FD account online and keep a track of the interest earnings and maturity date anytime, anywhere.


Since the benefits associated with a company FD are many, it only makes sense to invest in a fixed deposit with an NBFC as compared to any other financial institution.