Non-banking financial companies in India are offering deposit rates up to 8.50% for longer tenures, attracting savers seeking higher returns amid increased credit risk and the absence of government insurance protections.
Non-banking financial companies in India are drawing fresh attention from savers chasing higher fixed deposit returns, with some offering rates that climb to 8.50% a year for longer tenures. According to Business Today Bazaar, the appeal is clear: several NBFCs are advertising returns well above many bank deposits, but the higher yield comes with added risk that investors should not ignore.
Muthoot Capital Services is currently at the top of the pack, offering 7.65% on a 1-year deposit and 8.50% on 3-year and 5-year deposits, according to the Business Today Bazaar report. Manipal Housing Finance is paying 8.25% on 1-year and 3-year deposits and 7.75% on 5-year deposits, while Sundaram Finance is offering between 6.70% and 7.20% for 1 year and up to 8.07% for 3 years. Other prominent names in the comparison include Bajaj Finance, PNB Housing Finance, ICICI Home Finance and LIC Housing Finance, with rates varying by tenure.
The broader market shows a similar pattern. BankBazaar and FI.Money, which both track NBFC deposit rates, list comparable returns across tenures from 12 months to 60 months, while Policybazaar’s comparison notes that several of these companies remain among the highest-paying fixed deposit options available in mid-2026. Senior citizens may receive an additional 0.25% to 0.50% in some schemes, making the effective return higher for older investors.
Still, the lure of a bigger coupon should not be the only factor in the decision. Unlike bank deposits, NBFC fixed deposits do not carry DICGC insurance protection, so the credit quality of the issuer matters more. Investors are being urged to check the company’s credit rating, financial strength, premature withdrawal rules, interest payout options and tax impact before locking in funds, and to confirm the latest rate directly with the institution because these offers can change.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
