Archive · 12 Oct 2026
NBFC Fixed Deposits Gain Appeal as Interest Rates Rise
Interest rates on some fixed deposits have started moving up after a central bank rate increase.
Some finance companies are offering higher rates than large banks.
The article suggests splitting savings across deposits that end at different times, such as after one, two and three years.
That way, some money becomes available sooner if rates rise again.
Some banks also offer special deposits with high rates, but these cannot be withdrawn early.
Breaking an existing deposit to get a slightly higher rate may cost more in penalties.
The article says people should consider their needs and risk tolerance before investing.
After a repo rate hike, some NBFCs and small finance banks may offer more attractive fixed-deposit rates.
Bajaj Finance raised its one-year rate to 6.8%, and its three- and five-year rates to 7.75%.
The article recommends spreading deposits across one-, two- and three-year tenures to retain flexibility if rates rise.
Several special deposits offer rates of 8% or more, but premature withdrawal is not allowed on these schemes.
Investors are advised to avoid breaking deposits to rebook at slightly higher rates, as penalties may outweigh the gain.
- Who
- People considering fixed deposits, including senior citizens, and financial institutions offering them.
- What
- Fixed-deposit rates have risen at some NBFCs, and the article discusses staggering deposits across different tenures.
- When
- After the repo rate hike announced the previous week.
- Where
- India.
- Why
- Further repo rate increases are possible, and staggered deposits can let savers reinvest some money at newer rates while other deposits continue earning their locked-in rates.
- Bajaj Finance one-year rate
- Raised from 6.6% to 6.8%.
- Bajaj Finance three- and five-year rates
- Raised from 7.40% to 7.75%.
- State Bank of India and Punjab National Bank
- Each is cited as offering 6.3% for a three-year deposit.
- Muthoot Capital Services
- Offering 8.95%, as cited in the article's comparison.
- Suggested deposit ladder
- Split money across one-, two- and three-year tenures.
- Selected special-deposit rates
- Shivalik Small Finance Bank: 8% for 27 months; ESAF Small Finance Bank: 8% for 800 days; Utkarsh Small Finance Bank: 8.10% for 666 days.
- Special-deposit withdrawal restriction
- Premature withdrawal is not possible from the special deposits described.