Historically, a fixed deposit has always been a safe and reliable option for income generation in India. This is true across issuers, especially non-banking financial companies as NBFC FD rates are higher than most traditional banks or financial institutions. However, market downturns had affected the rates for a while.
Thankfully, things are now starting to look brighter as the RBI has steadily increased the repo rate over the past year. This translates to a better earning opportunity for individuals, especially those who prefer fixed-income instruments like the company fixed deposit.
Higher repo rates lead to higher NBFC FD rates, and this is a trend noticeable across the board. For instance, the PNB Housing FD rates have been hiked in the recent past, and you can now lock in your funds at interest rates up to 7.80% p.a.
This is just one of the many options you can consider as an investor and to know more about the NBFC FD rates you can benefit from, read on.
Top NBFC FD Rates to Consider
Take a look at some of the top issuers and their NBFC FD rates that you can capitalise on to earn higher returns.
| NBFCs | Interest Rates for Non-Senior Citizens | Interest Rates for Senior Citizens | Safety Ratings |
| PNB Housing Finance | 6.80% to 7.55% per annum | 7.05% to 7.80% per annum | FAA+ by CRISIL, AA by CARE |
| Bajaj Finance | 6.80% to 7.70 per annum | 7.05% to 7.95% per annum | AAA/STABLE by CRISIL and AAA (Stable) by ICRA |
| Mahindra Finance | 6.75% to 7.75% per annum | 7.00% to 7.75% per annum | IND AAA/Stable by India Ratings |
| ICICI Home Finance | 6.15% to 7.10% per annum | 6.40% to 7.35% per annum | AAA/Stable by CRISIL, ICRA and CARE |
| Shriram Transport Finance | 6.78% to 8.10% per annum | 7.28% to 8.60% per annum | AA+ Stable” by ICRA and “IND AA+/Stable” by India Ratings |
In order to help senior citizens earn more during retirement, all issuers provide an interest rate benefit. For instance, PNB Housing FD rates for seniors are 0.25% higher and those from Shriram Transport Finance are 0.50% more than rates for general investors.
Reasons to Open a Company/NBFC FD
While earnings from FDs may not be as high as market-linked options, including an NBFC FD in your portfolio helps you distribute the risk and earn reliable returns. You get this benefit since FD interest rates are locked in for the tenor you choose without exposing them to market risks.
NBFC FD rates are also higher than bank FDs that usually go up to 7% or 7.25% at most. This makes NBFCs an ideal choice when income generation or wealth-building is your goal.
Remember that the longer you remain invested in an FD, the higher your returns will be due to the power of compounding and higher rates from issuers. You can see this in the case of PNB Housing Finance FD rates that increase as your tenor increases.
The PNB Housing Finance FD rates for a 12-month cumulative FD are 7% for non-senior citizens and go up to 7.40% for 120 months. However, NBFCs also offer special tenors that allow you to earn more.
Taking the same example, the PNB Housing Finance FD rates are highest for 36 to 47 months at 7.55% for non-seniors. You can thus book your FD for such special tenors to increase your payout when going with NBFC deposits.
The current NBFC FD rates are some of the highest in the recent past and this can help you gain more for years to come. As such, now is the right time to invest and lock in your corpus with the right issuer.
Here are some other compelling reasons to open a FD from non-banking financial companies.
Safety
Even as NBFC FDs rates are some of the highest in terms of interest, investing with banks or post offices is still considered safer due to guarantees by the government. This is where the credit ratings agencies come in.
CARE, ICRA, and CRISIL are some agencies that assign NBFC FDs safety ratings based on a variety of factors. Before you start one, you can check these to understand the risk posed by a particular issuer’s FD.
When you park your savings in a highly rated FD, you can rest assured about getting your initial funds and interest payout in a timely manner and without any losses.
Liquidity
When you invest in an NBFC FD, you can choose when you receive your earnings, either at maturity or at regular intervals. This allows you to access money when you need it with prior planning. However, you can also get liquidity in other ways.
First, you can prematurely withdraw these FDs when you need to and pay a small penalty in terms of interest earnings. Second, you can get a loan against your FD when you need money urgently. Most NBFCs allow you to take a loan up to 75% of your FD value. Here, your FD continues to earn interest while you get the liquidity you need.
All these reasons make an NBFC FD ideal to grow your wealth in a low-risk environment, so get started today!
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