{"id":8773,"date":"2025-03-12T11:22:08","date_gmt":"2025-03-12T11:22:08","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8773"},"modified":"2025-03-12T11:23:37","modified_gmt":"2025-03-12T11:23:37","slug":"5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/","title":{"rendered":"5 Important FD Facts That Will Help in Compare FD Vs NBFC FD"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-8774\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/Picture1-FD.png\" alt=\"Picture1 FD\" width=\"972\" height=\"546\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/Picture1-FD.png 600w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/Picture1-FD-300x169.png 300w\" sizes=\"(max-width: 972px) 100vw, 972px\" \/><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69da6cac53089\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69da6cac53089\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#5_Important_FD_Facts_That_Will_Help_You_Compare_Bank_FDs_with_NBFC_FDs\" title=\"5 Important FD Facts That Will Help You Compare Bank FDs with NBFC FDs\">5 Important FD Facts That Will Help You Compare Bank FDs with NBFC FDs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#1_Interest_Rates_Which_Offers_Better_Returns\" title=\"1. Interest Rates: Which Offers Better Returns?\">1. Interest Rates: Which Offers Better Returns?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Bank_FDs\" title=\"Bank FDs:\">Bank FDs:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#NBFC_FDs\" title=\"NBFC FDs:\">NBFC FDs:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#2_Safety_and_Risk_Are_NBFC_FDs_Secure\" title=\"2. Safety and Risk: Are NBFC FDs Secure?\">2. Safety and Risk: Are NBFC FDs Secure?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Bank_FDs-2\" title=\"Bank FDs:\">Bank FDs:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#NBFC_FDs-2\" title=\"NBFC FDs:\">NBFC FDs:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#3_Liquidity_and_Premature_Withdrawal_Rules\" title=\"3. Liquidity and Premature Withdrawal Rules\">3. Liquidity and Premature Withdrawal Rules<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Bank_FD_Withdrawal_Rules\" title=\"Bank FD Withdrawal Rules:\">Bank FD Withdrawal Rules:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#NBFC_FD_Withdrawal_Rules\" title=\"NBFC FD Withdrawal Rules:\">NBFC FD Withdrawal Rules:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#4_Taxation_on_Interest_Earned_from_FDs\" title=\"4. Taxation on Interest Earned from FDs\">4. Taxation on Interest Earned from FDs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#5_Joint_FD_Rules_Understanding_Ownership_and_Withdrawal\" title=\"5. Joint FD Rules: Understanding Ownership and Withdrawal\">5. Joint FD Rules: Understanding Ownership and Withdrawal<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Types_of_Joint_FD_Accounts\" title=\"Types of Joint FD Accounts:\">Types of Joint FD Accounts:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Bank_FDs_vs_NBFC_FDs_for_Joint_Accounts\" title=\"Bank FDs vs. NBFC FDs for Joint Accounts:\">Bank FDs vs. NBFC FDs for Joint Accounts:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.caindelhiindia.com\/blog\/5-important-fd-facts-that-will-help-in-compare-fd-vs-nbfc-fd\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"5_Important_FD_Facts_That_Will_Help_You_Compare_Bank_FDs_with_NBFC_FDs\"><\/span><span style=\"color: #000080;\"><strong>5 Important FD Facts That Will Help You Compare Bank FDs with NBFC FDs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Fixed deposits (FDs) have long been one of the most preferred investment options for individuals seeking security and guaranteed returns. However, choosing between bank FDs and NBFC FDs (Non-Banking Financial Company FDs) can be confusing. While both options offer a fixed interest rate and capital safety, there are key differences that investors should consider. Understanding these FD facts will help investors make an informed choice. Additionally, knowledge of joint FD rules is essential for those planning to <a href=\"https:\/\/www.bajajfinserv.in\/investments\/fixed-deposit\">open fixed deposits<\/a> with multiple account holders.<\/p>\n<p>This article highlights five crucial FD facts to compare bank FDs with NBFC FDs, their advantages, risks, and rules regarding joint FD accounts.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Interest_Rates_Which_Offers_Better_Returns\"><\/span><span style=\"color: #000080;\"><strong>1. Interest Rates: Which Offers Better Returns?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One of the primary reasons investors choose NBFC FDs over bank FDs is the higher interest rates.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bank_FDs\"><\/span><span style=\"color: #000080;\"><strong>Bank FDs:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Public sector banks generally offer lower interest rates, ranging from 5% to 7.5% per annum.<\/li>\n<li>Private sector banks offer slightly higher rates, ranging from 6% to 8% per annum.<\/li>\n<li>Senior citizens get additional interest rate benefits (typically 0.50% higher).<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"NBFC_FDs\"><\/span><span style=\"color: #000080;\"><strong>NBFC FDs:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>NBFC FDs generally offer higher returns, with interest rates ranging from 7% to 9.5% per annum.<\/li>\n<li>Some highly-rated NBFCs provide special schemes with higher returns for long-term deposits.<\/li>\n<li>Interest payouts can be chosen as cumulative (compounded) or non-cumulative (periodic interest payments).<\/li>\n<\/ul>\n<p><strong>Key Takeaway:<\/strong> If higher interest earnings are a priority, NBFC FDs may be a better option, provided the issuer has strong credit ratings.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Safety_and_Risk_Are_NBFC_FDs_Secure\"><\/span><span style=\"color: #000080;\"><strong>2. Safety and Risk: Are NBFC FDs Secure?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Safety is a crucial factor when choosing between a bank FD and an NBFC FD.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bank_FDs-2\"><\/span><span style=\"color: #000080;\"><strong>Bank FDs:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>All bank deposits (up to Rs. 5 lakh per depositor, per bank) are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).<\/li>\n<li>Highly regulated by the Reserve Bank of India (RBI), ensuring strict financial compliance.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"NBFC_FDs-2\"><\/span><span style=\"color: #000080;\"><strong>NBFC FDs:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li><strong>NBFC FDs do not have DICGC insurance<\/strong>, which means deposits are not guaranteed in case of financial distress.<\/li>\n<li>Investors must check the credit ratings assigned by agencies like CRISIL, ICRA, or CARE.<\/li>\n<li>NBFCs with AAA ratings are considered safe, while those with lower ratings carry more risk.<\/li>\n<\/ul>\n<p><strong>Key Takeaway:<\/strong> Bank FDs offer higher safety, whereas NBFC FDs provide higher returns with varying degrees of risk.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Liquidity_and_Premature_Withdrawal_Rules\"><\/span><span style=\"color: #000080;\"><strong>3. Liquidity and Premature Withdrawal Rules<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Liquidity refers to the ability to withdraw funds before maturity without significant losses.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bank_FD_Withdrawal_Rules\"><\/span><span style=\"color: #000080;\"><strong>Bank FD Withdrawal Rules:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Most banks allow premature withdrawals, but a penalty of 0.5% to 1% is charged on the interest rate.<\/li>\n<li>Some banks offer flexi FDs, which allow partial withdrawals without breaking the entire FD.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"NBFC_FD_Withdrawal_Rules\"><\/span><span style=\"color: #000080;\"><strong>NBFC FD Withdrawal Rules:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Many NBFCs impose stricter withdrawal conditions, especially on non-callable fixed deposits.<\/li>\n<li>Premature withdrawal may result in higher penalties or complete disqualification from earning interest.<\/li>\n<\/ul>\n<p><strong>Key Takeaway:<\/strong> If liquidity is a priority, bank FDs are a better option as they offer more flexible withdrawal terms compared to NBFC FDs.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Taxation_on_Interest_Earned_from_FDs\"><\/span><span style=\"color: #000080;\"><strong>4. Taxation on Interest Earned from FDs<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Understanding the taxation aspect of FD investments is crucial for maximizing returns.<\/p>\n<ul>\n<li>Interest earned on both bank and NBFC FDs is taxable under &#8220;Income from Other Sources&#8221;.<\/li>\n<li>Tax Deducted at Source (TDS) is applicable if the total interest exceeds \u20b940,000 per year (\u20b950,000 for senior citizens).<\/li>\n<li>Tax-Saving Bank FDs (with a 5-year lock-in) allow deductions of up to \u20b91.5 lakh under Section 80C, but NBFC FDs do not provide such tax benefits.<\/li>\n<\/ul>\n<p><strong>Key Takeaway:<\/strong> While both bank and NBFC FDs attract taxation, <a href=\"https:\/\/www.bajajfinserv.in\/investments\/tax-saving-fixed-deposit\">tax-saving FDs<\/a> are available only with banks.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Joint_FD_Rules_Understanding_Ownership_and_Withdrawal\"><\/span><span style=\"color: #000080;\"><strong>5. Joint FD Rules: Understanding Ownership and Withdrawal<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A joint FD account allows two or more individuals to invest together in an FD.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Types_of_Joint_FD_Accounts\"><\/span><span style=\"color: #000080;\"><strong>Types of Joint FD Accounts:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li><span style=\"color: #000080;\"><strong>Either or Survivor:<\/strong><\/span><\/li>\n<\/ol>\n<p>o\u00a0 Either account holder can withdraw the FD amount.<\/p>\n<p>o\u00a0 Commonly used for hassle-free access in case of the demise of one account holder.<\/p>\n<ol start=\"2\">\n<li><span style=\"color: #000080;\"><strong>Anyone or Survivor:<\/strong><\/span><\/li>\n<\/ol>\n<p>o\u00a0\u00a0 More than two account holders can operate the account.<\/p>\n<p>o\u00a0\u00a0 Any one of the depositors can withdraw before maturity.<\/p>\n<ol start=\"3\">\n<li><span style=\"color: #000080;\"><strong>Jointly Operated:<\/strong><\/span><\/li>\n<\/ol>\n<p>o\u00a0\u00a0 All account holders must sign for withdrawals and renewals.<\/p>\n<p>o\u00a0\u00a0 Ideal for business partners or family members seeking equal control.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bank_FDs_vs_NBFC_FDs_for_Joint_Accounts\"><\/span><span style=\"color: #000080;\"><strong>Bank FDs vs. NBFC FDs for Joint Accounts:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Most banks and NBFCs follow similar rules for joint FDs.<\/li>\n<li>Some NBFCs may have stricter documentation requirements for joint holders.<\/li>\n<li>Tax liability on interest is shared between joint holders based on contribution.<\/li>\n<\/ul>\n<p><strong>Key Takeaway:<\/strong> Joint FDs are beneficial for family members, but investors should choose the right operational mode based on financial goals.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><span style=\"color: #000080;\"><strong>Conclusion<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Understanding these FD facts can help investors make informed decisions when choosing between bank and <a href=\"https:\/\/www.caindelhiindia.com\/service\/nbfc-annual-compliance\">NBFC<\/a> FDs. While NBFC FDs offer higher interest rates, they come with higher risk and lower liquidity. On the other hand, bank FDs provide better safety, liquidity, and tax-saving options. Additionally, knowing joint FD rules is essential for those investing with family members. Ultimately, investors should assess their financial goals, risk appetite, and liquidity needs before selecting the best FD option that aligns with their investment strategy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>5 Important FD Facts That Will Help You Compare Bank FDs with NBFC FDs Fixed deposits (FDs) have long been one of the most preferred investment options for individuals seeking security and guaranteed returns. However, choosing between bank FDs and NBFC FDs (Non-Banking Financial Company FDs) can be confusing. While both options offer a fixed &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[830],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8773"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8773"}],"version-history":[{"count":4,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8773\/revisions"}],"predecessor-version":[{"id":8777,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8773\/revisions\/8777"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}