The Reserve Bank of India (RBI) has reduced interest rates by a total of 125 basis points in 2025. The repo rate was cut again by 25 basis points during the MPC meeting on December 5.
Because of these reductions, banks and NBFCs have lowered their fixed deposit (FD) interest rates, which has reduced the returns for traditional savers.
Most public and private sector banks now offer FD interest rates between 6.5% and 7.5%. Many NBFCs have also cut their rates. Earlier, investors used to earn around 8–9% easily, but now returns have gone down.
Still, some non-banking companies are offering interest rates up to 8.85% per year, especially for senior citizens. Senior citizens usually get an extra 0.25% to 0.50% interest.
NBFC and Corporate FD Rates
Compared to banks, many NBFCs are offering higher interest on corporate FDs. Some examples include:
Bajaj Finance: 7.30%
Sundaram Finance: 7.50%
Manipal Housing Finance: 8.50%
Shriram Finance: 8.65%
Muthoot Capital: 8.85%
Because of these attractive rates, many investors are shifting towards corporate FDs.
Invest Carefully and Check Risks
Experts warn that higher returns usually come with higher risk. Bank FDs are safer because deposits up to ₹5 lakh are insured under DICGC.
However, corporate FDs do not offer this insurance. If a company faces financial problems, investors may lose their money.
So, experts suggest investing only in companies that have AAA or AA ratings from agencies like CRISIL, ICRA, or CARE. Although NBFCs are monitored by the RBI, risks cannot be completely avoided.
If an investor wants higher returns and is ready to take a small amount of risk, then corporate FDs may be suitable—especially for senior citizens.
But for those who want full safety of their money, bank FDs and government-backed schemes are better choices.
