5 NBFCs offering more than 8% FD interest rate for senior citizens
Non-banking financing companies (NBFCs) offer fixed deposit services to their customers; while they are similar to bank fixed deposits in many aspects, there is a difference when it comes to safety of deposits. As NBFCs are not protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which is not in case of bank fixed deposits as they are covered under DICGC for amounts up to Rs 5 lakh.Here is a look at 5 NBFCs offering above 8% FD interest rate for senior citizens.
Bajaj Finserv FD interest rate
Bajaj Finserv interest rate offers between 7.15% to 7.85% for regular citizens for non-cumulative deposits, for senior citizens it offers 0.25% higher. Senior citizen can interest rates up to 8.10%.
Shriram Finance FD interest rate
Shriram Finance FD interest rate offers 7.30% to 8.25% per annum on non-cumulative deposits. Senior citizens who are aged 60 and above will receive an additional 0.50% interest rate. Senior citizen can interest rates up to 8.75%.
Sundaram Finance FD interest rate
Sundaram Finance offers fixed deposit interest rates between 7.20% to 7.50% for regular citizens and 0.50% higher for senior citizens.
LIC Housing Finance FD interest rate
LIC Housing Finance offers interest rates of 7%to 7.50% on deposits up to Rs. 20 crore for non-cumulative deposits.
Muthoot Finance FD interest rate
Muthoot Finance offers interest under Muthoot Cap, for non-cumulative deposit it offers 6.25% to 7.25%.
What are NBFCs?
According to the RBI, “A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company)
BFCs are categorized a) in terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs, b) non deposit taking NBFCs by their size into systemically important and other non-deposit holding companies (NBFC-NDSI and NBFC-ND) and c) by the kind of activity they conduct.
Difference between cumulative and non cumulative
The interest amount in a cumulative fixed deposit scheme is compounded over the life of the deposit and paid at maturity. While interest is paid on a monthly, quarterly, semi-annual, or annual basis in a non-cumulative arrangement.
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This story originally appeared on: India Times - Author:Faqs of Insurances
