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Non-Banking Financial Companies (NBFCs) Fixed deposit is a low-risk investment option used for depositing a certain amount for a fixed period over a predetermined interest rate. There are different investment options for
Investors choose from NBFC FDs based on the interest rates offered, tenure options, features and flexibility.
The FD rates by NBFCs are diverse and they also offer flexible tenures, offering investors high returns on their investments. NBFC FDs are also accessible to a wide range of individuals. Let’s go through the highlights of NBFC fixed deposits from below:
Minimum Investment Amount
₹1000
Interest Rate
6.79% - 9.91% p.a.
Tenure
12 - 120 months
*Note- The interest rates are subject to change. Please check the NBFC’s official website for the latest information.
NBFC FDs give special benefits to senior citizens and women by offering them additional interest of up to 0.50% on top of existing rates. This inclusive approach ensures that senior citizens can be taken care of after retirement and women are empowered through financial independence.
Fixed Deposits offered by Non-Banking Financial Companies (NBFCs) are popular investment options because of their competitive interest rates and flexibility. Investors often seek out FDs from top NBFCs due to their reputation for reliability and attractive interest rates. Here are some of the top NBFC fixed deposit rates:
*Note- The interest rates are subject to change. Please check the NBFCs official website for the latest information.
NBFC FD Calculator
An online FD calculator is an online tool that helps you estimate your returns on maturity upon entering deposit amount, interest rate, and tenure to calculate the estimated maturity amount, giving you clarity on your financial decisions and FD investment options.
₹
%
Maturity Date
:
Invested Amount
: ₹10,000
Interest Amount
: ₹666
Maturity Amount
: ₹10666
Another way to calculate the FD maturity amount is by using the formula:
A=P x (1+r/n)^nt
Where: A = Maturity amount P = Principal amount r = Annual interest rate n = Number of times interest is compounded per year t = Tenure of the FD in years
Here is an example of the calculation:
Let the investment amount P = ₹10,000, interest rate ‘r’ = 7.7% p.a., tenure ‘t’ = 5 years and n = 1 year
A=P x (1+r/n)^nt
A=10000 x (1+7.7%/1)^1 x 5
A=10000 x (1+0.077)^5
A=10000 x (1+0.077)^5
A=10000 x 1.4193039
A=₹14,193.04
(Please note that the calculation given above is just an example and indicative. The actual amount may differ.)
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Fixed Deposits from NBFCs are of two different types, these are cumulative FDs and non-cumulative FDs:
Cumulative FD
Non-cumulative FD
Here is an in depth insight for the 2 types of FDs.
Cumulative fixed deposits: Cumulative Fixed Deposits are a specific type of fixed deposit in which the accrued interest is compounded and paid together with the principal amount at the end of the deposit term. The reinvested interest will lead to increased returns upon maturity. This deposit option is perfect for individuals who favour receiving a consolidated sum at the end of the investment duration instead of periodic interest payouts.
Non-cumulative fixed deposits: Non-Cumulative Fixed Deposits are savings plans that give you regular interest payments at intervals of the investor’s choosing, such as monthly, quarterly, half yearly, or annually. Unlike cumulative deposits, the interest earned is not reinvested into the principal amount, but allows investors to withdraw it periodically as income.
NBFC FD Eligibility Criteria
The eligibility criteria for NBFC fixed deposits includes a diverse range of entities, these are:
Resident Indian citizens
Minors (through their parents or guardians)
NRIs (Non-resident Indians)
Family Trust
Charitable Trust
HUF (Hindu Undivided Family)
Clubs
Companies
Trusts and Foundation
Sole Proprietorship
Partnership Firms
Association Societies
Unincorporated Association or Body of Individuals.
Documents Required for NBFC FD
There are several documents required to apply for an NBFC fixed deposit, these are:
Resident Indian Citizens
Passport
Driving licence
Permanent Account Number (PAN) card
Voter identity card issued by the Election Commission of India
Job card issued under the National Rural Employment Guarantee Act (NREGA), duly signed by a State Government officer
Letter from the Unique Identification Authority of India containing details of name, address, and Aadhaar number, or any other document specified by the Central Government in consultation with the regulator.
NRIs (Non-Resident Indians)
Passport with valid visa/OCI
Overseas employment letter (optional, for confirmation of residential status and overseas address)
PIO cards
PAN card
Local proof of address, if different from the passport address
Bank account statement or passbook
Local property papers with registration deed
EB Bill card
Voter ID or driving licence
Tax Residency Certificate from the Income Tax department of the country of residence
Copy of the passport at the beginning and end of the financial year.
Hindu Undivided Families (HUF)
Non-Individual FD Application Form
PAN Card and Address proof of Karta
PAN Card of HUF
HUF Deed / Declaration from the Karta
KYC form of Karta
Trust and Foundations
For investments exceeding Rs 1 crore, a declaration of the income source is required.
Provide names, addresses, and contact details of trustees, settlers, beneficiaries, and signatories.
Only deposits from registered trusts are accepted.
Our investment does not qualify under Sec 11(5) of the Income Tax Act.
Association of Persons
Non-Individual FD Application Form
Certificate of Registration
PAN Card and address proof of the entity and the authorised signatories
Board Resolution of the managing body to invest in FD along with a list of authorised signatories
MOA and AOA of the Association
KYC Form of authorised signatories
Tax Exemption Certificate if applicable
Certified copy of Share Holding Pattern on the Letter Head of the Company
KYC of beneficiary owners holding more than 15% of property, capital, or profits of the association, along with recent photographs.
NBFC fixed deposits offer unique features and benefits that make them attractive to investors, these are:
Guaranteed Returns: Investors receive guaranteed returns at fixed interest rates, making sure that the maturity value exceeds the initial investment.
Competitive Interest Rates: Enjoy competitive interest rates of up to 9.91% p.a., with additional benefits for senior citizens and women investors.
Diverse FD Schemes: Choose from a variety of FD schemes that are personalised to suit different financial goals, with flexible investment amounts and tenures.
Paperless Process: Open an FD account seamlessly online with minimal documentation required, providing convenience and ease of access.
Minimal Investment: Start your investment journey with a minimal deposit amount of ₹1000, making FDs accessible to all investors.
Loan Facility: Avail a loan against your FD in case of financial emergencies, with interest rates lower than normal personal loans.
Regular Interest Payouts: Choose between cumulative and non-cumulative FDs, with options for regular interest payouts of monthly, quarterly, half-yearly or annually.
High Credit Rating: Investors can benefit from the safety and security of FD investments backed by high credit ratings, ensuring reliability and stability.
Tax Benefits: Enjoy tax benefits with no TDS on interests of up to ₹5000 in a year, providing additional savings on your investment returns.
There are many factors that can influence NBFC FD rates. Understanding them is important for making informed investment decisions. The factors affecting NBFC FD interest rates are:
Economic Conditions: The economic environment of the country, including inflation rates, interest rates set by the central bank, and overall market conditions, can impact NBFC FD rates.
NBFC Policies: Each NBFC will have its own set of policies and strategies regarding interest rates. These can vary based on their business objectives, target market, and funding requirements.
Competition: Competition among NBFCs and other financial institutions can also affect FD rates. Higher competition may lead to more attractive rates while less competition will lead to higher interest rates.
Credit Rating: The credit rating of an NBFC can play an important role in determining FD rates. Higher-rated NBFCs may offer better rates to attract investors due to their lower risk.
Government Policies: Government policies and regulations, particularly related to monetary policy and taxation, can impact interest rates offered by NBFCs.
The NBFC that offers the highest FD rate is Muthoot Finance with an interest rate of 9.91% p.a.
Unity Small Finance Bank offers the highest interest rate for FDs at 9.00% p.a.
The safety of an NBFC for FDs depends on its credit rating, reputation, and regulatory compliance. Higher-rated institutions are generally considered safe.
The choice between banks and NBFCs depends on various factors like interest rates, tenure,, and your individual risk tolerance and preferences.
The tenure for NBFC FDs range between 12 to 120 months.
The best type of FD depends on your individual goals. Cumulative FDs offer compounded returns, while non-cumulative FDs provide regular interest payouts.
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