Economy

Top 10 Non-Bank Financial Companies (NBFCs) That Pay High Rates Of Interest On Fixed Deposits

The economy is suffering as a result of COVID-19’s influence on many sectors and industries. Saving and investing your hard-earned money in FDs is crucial. But where do you intend to go? Most banks have lowered their FD rates due to the deteriorating economy. Due to the fact that practically every financial institution, particularly banks, is suffering with operations and deposits, finding high-interest rate FDs has become difficult. Some non-banking financing organisations (NBFCs) have begun to offer higher deposit interest rates than typical commercial banks.

These NBFCs offer competitive interest rates and do not require a significant deposit to create a savings account with them. An person can open a fixed deposit (FD) at any institution with a minimum investment of Rs 1000 to Rs 10000.

Top 10 Non-Bank Financial Companies (NBFCs)

NBFC

Here are ten NBFCs with a high rate of interest, a solid return on investment, and a lengthy history of delivering fixed deposits to a wide range of consumers.

Sr. No.NBFCInterest Rates (p.a)Interest rate (p.a) Senior CitizensMinimum DepositTenure
1Hawkins Cooker Ltd8.00%NA250003 years
2Shriram City Union Finance7.75%8.05%50005 Years
3Shriram Transport Finance Company7.48%7.78%50005 years
4Muthood Finance7.25%NA10005 Years
5Bajaj Finserve6.80%7.05%250003-5 years
6HDFC Housing Finance6.70%6.95%NA8.25 Years
7Aditya Birla Capital6.45%6.70%50005 Years
8Mahindra & Mahindra Finance Service Ltd6.05%6.50%50005 Years
9KTDFC Ltd6.00%6.25%100003 Years
10Sundram Finance5.80%6.30%100003Years

To invest in these NBFC FDs, all you need is your PAN and a valid identification and address proof document, such as an Aadhaar Card. You may invest in some of them online, while others require you to invest in person. Senior folks are eligible for a 20% to 50% discount off the standard interest rates granted to other clients. Corporate/NBFC FDs, unlike bank FDs, are not covered by the DICGC’s insurance.

Are Corporate FDs Taxable?

Interest earned on NBFC-issued FDs, like interest earned on bank FDs, is taxed at the depositor’s highest income tax rate. Only if the annual interest income from the deposit surpasses Ra 5,000 is the investor compelled to pay tax.

Why invest in Corporate FDs rather than Bank FDs?

Individuals seeking higher returns and portfolio diversification should consider corporate FDs. They offer a better rate of return than bank FDs. They may be compared in terms of operations and ratings, making it easier to identify an appropriate corporate FD option.

Conclusion

Depositors could consider putting a portion of their money into FDs offered by NBFCs because of the low interest rates offered by banks. After exhausting the government’s small-savings programmes, you may want to try these deposits. These NBFC deposits are suitable for conservative investors, even though debt funds are recommended. When making your decision, look for NBFC FDs that have high-rated deposits or deposits that have been rated AAA by rating organisations like CRISIL and ICRA.

This is not meant to be construed as advice. If you’re not sure, talk to a financial advisor or look for more information on the NBFC’s website.

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