Fixed Deposits: These NBFCs offer up to 7.25% interest on 1-year deposit

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When it comes to investment and security, then fixed deposits are still the most preferred option of an average Indian. It gives guaranteed returns within a fixed tenure ranging from 7 days to 10 years.

It is important to invest in FDs offering even a slightly higher interest rate. And when it comes to interest rates, deposits offered by non-banking financial companies (NBFCs) offer higher interest rates than banks or post offices.

NBFC FDs are issued by private companies to raise finances. The companies issue investors a deposit certificate promising returns at a fixed rate of interest.

Attractive returns

Banks and post-offices usually provide a lower rate of interest compared to NBFCs. Fixed deposits offered by NBFCs offer higher interest rates, which can go up to 8% and higher. For this reason, many investors prefer NBFCs for FD investments.

Check credit rating of the Company

Unlike fixed deposits offered by banks, there is no insurance for FDs from NBFCs. This is why it is important to invest with an NBFC whose safety is attested by reputed agencies. One should see the credit rating on CRISIL/ICRA to check the company’s FD rating.

Institutions and companies also offer different types of fixed deposit schemes. For example, in cumulative FDs offered by companies, interest earned is added to the amount invested and remains invested in the scheme. While in non-cumulative FDs the interest earned is paid out as regular income during the scheme’s duration.

Here are the latest fixed deposit rates:

( Rates are given for the cumulative option only.)