INSUBCONTINENT EXCLUSIVE:
When the fixed deposit (FD) interest rates
offered by large public sector banks (PSBs) such as State Bank of India (SBI) stay under the range of 6 to 7 percent per annum, the
depositors feel compelled to set their sights on an alternative savings option i.e
It is noteworthy that the NBFCs offer relatively higher interest rates on their fixed deposit schemes, somewhere in the range of 8 to 8.5
Bajaj Finserv, for instance, offers an interest rate between 8.10 per cent and 8.6 per cent (according to its website bajajfinserv.in),
which is nearly 200 basis points higher than the SBI FD interest rates of 6.4 per cent
Similarly, Kerala Transport Development Finance Corporation (KTDFC) offers interest rate upto 8.25 per cent, according to its website
(ktdfc.kerala.gov.in).Interest Rates Offered By Bajaj Finserv On Its Fixed Deposits (FDs)Tenor in MonthsMinimum deposit size (in
608.10%7.83%7.88%7.95%8.10%Special tenors scheme151,00,0007.70%7.45%7.49%7.56%7.70%However, only a few NBFCs are allowed by the banking
regulator to accept deposits
One can find the list of RBI-recognized NBFC here.The list shows that there are 23 registered NBFCs in Delhi, 27 in Chennai and five in
Mumbai.However, one must understand that the FDs of NBFCs are not as safe as that of PSBs such as State Bank of India (SBI) and some NBFC
(especially with low credit ratings) might even skip the interest payments to the depositors
To combat such a scenario, the Reserve Bank of India (RBI) introduced a facility of ombudsman in February this year under the Ombudsman
Scheme For Non-Banking Financial Companies, 2018.: To Earn Higher Interest Rates, Open SBI Savings Plus AccountThe scheme of ombudsman has
initially been introduced at the four metro centres of Chennai, Kolkata, Mumbai and New Delhi for handling complaints from the respective
zones, so as to cover the entire country
The scheme came into effect from February 23.There is no denying the fact that the NBFC deposits are relatively riskier than the fixed
But at the same time, they pay higher interest rates as well
To be able to safeguard your principal amount, one can go for high credit-rating NBFCs
The ones with credit rating of A to AAA are safe while the NBFCs with B to BBB are relatively unsafe.Besides the ratings, one can also
consider the duration and security backing of debt instruments
The deposits which are secured are safer while the unsecured deposits are not.Similarly, the long term deposits are relatively more unsafe
because the liquidity and financial condition of NBFC might change in the long run.Besides the fixed deposits, NBFCs also offer
non-convertible debentures (NCDs)
The rate of interest is 9.75 per cent, as per the JM Financial website
To find the difference between NCDs and FDs, one can click here.Interest Rates Offered By Fincare Small Finance Bank On Its FDsTenureGeneral
PublicSenior citizens7 days to 45 days4%4.50%46 days to 90 days4%4.50%91 days to 180 days6%6.50%181 days to 364 days7%7.50%12 months to 15
months8%8.50%15 months 1 day to 18 months8.25%8.75%18 months 1 day to 21 months8.50%9%21 months 1 day to 24 months8.75%9.25%24 months 1 day
to 36 months9.00%9.50%3 years 1 day to 5 years8%8.50%5 years 1 day to 7 years7%7.50%Just as NBFCs, one can also make deposits with the small
finance banks that offer as much as 9 per cent per annum as compared to the SBI's FD deposit rates of 6.4 per cent
A fixed deposit fetches an interest rate of 8 per cent in Fincare Small Finance Bank; 8.75 per cent in ESAF Small Finance Bank; 8 per cent
in Ujjivan Small Finance Bank; and 7 per cent in AU Small Finance Bank.
