Finance Blog

557

Shift to NBFCs for Higher Interest on Fixed Deposits

SHARE
, / 296 0

There are many investments sources in the market, but a novice investor would not want to lose his money in the first attempt. While investing, a novice investor envisions to double his investments in a lesser time. Investments in business, stocks and shares are risky and that is why many people don’t opt them for investments. Most first timers invest in options like Fixed Deposits or debt funds.

Debt funds, however, do not assure you stable returns. The most reliable option that remains is Fixed Deposits. But due to the decline in the economic conditions of the country post the demonetization drive, the financial institutions and money lenders have made many reforms in their lending policies which have affected the interest rates for gaining returns via FDs.

The decline in FD interest rates has put many investors into confusion, as the low-interest rates provided by the lenders are not proving beneficial for the investors. In such situations, people have a common opinion of investing in mutual funds or in stocks and shares, while others might be thinking of waiting for the interest to rise in the coming times.

Keeping the money in a Savings account will not give you many benefits as the banks are providing low-interest rates on FDs; the NBFCs have taken the command. The NBFCs are providing interest rates around 7 to 8 percent, whereas, the banks are providing interest at 6 to 7 percent. In accordance with the interest rates, the NBFCs can prove to be a better option for investment.

The people who have invested in FDs and have invested for a long tenure with the banks might be affected by the new interest rates. To avoid wasting your time and money, you can choose to switch your FD account from the banks to NBFCs. This step should only be taken if you are ready to pay the charges and complete the formalities of switching the FD account.

Versatile Lending Rates: The NBFCs provide different interest rates for applicants by classifying them into groups like:

  1. New FD applicants: The applicants who apply for FDs get interested rates up to 7 to 8 percent.
  2. Senior citizens: The senior citizens can avail interest benefits from 8 to 8.5 percent.
  3. Existing loan customers: NBFCs also provide FDs to the existing loan applicants at 7 to 8 percent interest.

Online Application: To make the application more convenient, the NBFCs have introduced online Fixed Deposit application process, where you can fill the form online and you will get a confirmation call from the lending company. As soon as your application is confirmed, the company will send an agent to collect all the necessary documents and the cheque for the payment.

Reliability: You cannot trust anyone when the matter is related to money. While depositing your money with the NBFCs, you need to make sure you do the brief checking of the NBFCs or you can choose to deposit your money with a reputed and recognised NBFC.

It is very important to consider the differences between the banks and the NBFCs. The terms and conditions of the banks differ with that of NBFCs. Hence, it is necessary to know all the terms, conditions and hidden costs of the NBFCs.

Leave A Reply

Your email address will not be published.

*