NBFC FD

NBFC FD stands for Non-Banking Financial Company Fixed Deposit. It is a type of investment that you can make with a Non-Banking Financial Company (NBFC). NBFCs are financial institutions that are not banks. They offer a variety of financial products, including fixed deposits.

Get a help

A fixed deposit (FD) is one of the safest and most preferred investment avenues for individuals looking to grow their savings and generate wealth. This instrument is popular given its low-risk characteristic. Banks and post office FD are backed by the government hence they operate at practically no risk, this is why these have traditionally been the go-to option for FD. However, they offer lower interest rates compared to NBFC FD rates.

What is NBFC FD?

NBFC FDs offer a fixed interest rate for a fixed period of time. The interest rate is usually higher than what you would get from a bank fixed deposit. This is why Non-Banking Financial Companies (NBFCs) have emerged as strong candidates in recent years.

Read on to know more about what affects the NBFC fixed deposit interest rates and how they are calculated along with the

How are the NBFC FD interest rates calculated

The NBFC FD interest rates are dependent on various factors including:

Financial climate and market movements
Chosen tenure
RBI policies and repo rate
CRISIL ICRA credit ratings
Investor profile
FD type

Grow your wealth with the highest NBFC FD interest rates

If you aim to grow your savings and create a wealth pool that you can utilise for personal expenses, or even use as an emergency fund then an NBFC FD is the perfect fit.

Factors affecting NBFC FD interest rates

Multiple factors influence the interest rates offered by NBFCs on fixed deposits. Here are some of the key influencing factors:

Market movements

The ongoing economic climate, repo rates, and inflation rates play a pivotal role in determining interest rates. FD providers NBFCs monitor these closely to align their rates accordingly.

Safety and credit ratings

NBFCs with higher credit ratings usually offer better interest rates. CRISIL and ICRA are the topmost credit rating agencies in India. A higher credit rating indicates the company’s financial stability and reliability.

Tenure, investor type, FD type

Each NBFC has its own set of rules to determine interest rates. Generally longer tenures attract higher FD rates, Senior citizens are given extra rate benefits and lastly, the cumulative FD type that offers returns at maturity instead of periodic payouts earns you more returns because of the power of compounding.

Armed with this information, you can now make an informed decision before parking your money in an NBFC FD. It is a smart option for investors that wish to maximise their savings safely.

Benefits and risks of NBFC FD

If you are considering investing in an NBFC FD, it is important to do your research and choose a company that is well established and has a good track record. You should also make sure that you understand the risks involved before you invest.

Higher interest rates: NBFCs typically offer higher interest rates than banks.
Flexibility: You can choose the tenure of your investment, from a few months to a few years.
Convenience: You can open an NBFC FD online or at a branch.

Here are some of the risks of investing in an NBFC FD:

Higher risk: NBFCs are not as regulated as banks, so there is a higher risk of default.
Tax implications: NBFC FDs are not tax saving, and you may have to pay taxes on the interest you earn from your NBFC FD.

Overall, NBFC FDs can be a good investment option for those who are looking for higher interest rates and flexibility. However, it is important to understand the risks involved before you invest.

Still Any Queries?