An NBFC cannot pay you more than 12.5% a year on a public deposit. That is a hard ceiling in RBI’s Master Direction on the acceptance of public deposits. It is the single most useful number on this page, because it tells you the whole range a corporate deposit can occupy.
The spread over a bank fixed deposit is not a bonus. It is the price of giving up deposit insurance. Bank deposits are insured by DICGC up to ₹5,00,000 per depositor per bank. An NBFC deposit is not insured at all, and RBI does not guarantee repayment.
What are the rules on NBFC and corporate fixed deposits?
| Rule | Figure | Applies to | Source |
|---|---|---|---|
| Maximum interest rate | 12.5% a year | Every deposit-taking NBFC | RBI Master Direction, para 14 |
| Minimum tenure | 12 months | Every public deposit | RBI Master Direction, para 11 |
| Maximum tenure | 60 months | Every public deposit | RBI Master Direction, para 11 |
| Credit rating | Minimum investment grade, refreshed at least yearly | NBFCs with net owned funds of ₹25 lakh or more | RBI Master Direction, para 8 |
| Deposit ceiling | 1.5 times net owned funds | Qualifying deposit-taking NBFCs | RBI Master Direction, para 12 |
| Lock-in | Three months, with an exception on death | Premature withdrawal | RBI Master Direction, paras 23–27 |
| Deposit insurance | None | Every NBFC public deposit | RBI Master Direction, para 21 |
Paragraph 21 is worth reading twice. The application form itself must state that the deposits solicited are not insured. It must also state that RBI does not undertake any responsibility for repayment. The regulator made the warning compulsory because the risk is real.
Why does the spread over a bank FD exist?
An NBFC funds itself in the market. It does not have a current account and savings account base to lend from. Retail deposits are one of its more expensive sources, and it pays up because it must.
The lending side explains the rest. Deposit-taking NBFCs usually lend into segments banks price higher or avoid. Higher yields on the asset side allow higher rates on the liability side. That relationship is the point. A deposit paying well above the bank rate is funding a loan book that earns well above the bank loan book.
So the spread is information, not a gift. When one issuer pays noticeably more than its peers, the first question is what changed in its funding, not what changed in its generosity.
How does this compare with an insured bank deposit?
The rates below are from our own bank deposit tracking, as of 2 October 2026, for deposits below ₹3 crore. They are the insured alternative you are giving up.
| Bank | Type | General rate | Senior citizen | Insured? |
|---|---|---|---|---|
| Shivalik Small Finance Bank | Small finance bank | 8.00% | 8.25% | Yes, to ₹5,00,000 |
| Unity Small Finance Bank | Small finance bank | 8.00% | 8.50% | Yes, to ₹5,00,000 |
| Jana Small Finance Bank | Small finance bank | 8.00% | 8.30% | Yes, to ₹5,00,000 |
| Bank of Baroda | PSU bank | 6.75% | 7.25% | Yes, to ₹5,00,000 |
| HDFC Bank | Private bank | 6.50% | 7.10% | Yes, to ₹5,00,000 |
Look at the top of that table before you shop for a corporate deposit. A small finance bank paying 8.00% is insured. Many corporate deposits do not clear it by much. Our bank FD rate table carries the full list and the refresh date.
Why this page carries no issuer rate table
Because we do not hold verified corporate deposit rates, and we will not publish rates we cannot stand behind. Issuer rate cards change without notice, and a stale corporate FD table is worse than none. The rules above do not change weekly. The rates do.
Check the rate on the issuer’s own deposit page, and check it on the day you apply. Then check the credit rating on the rating agency’s website, not on the issuer’s brochure. Paragraph 8 requires the rating to be refreshed at least once a year, so an old rating on a marketing page tells you nothing about today.
How is the interest taxed?
Interest on a corporate or NBFC deposit is taxed at your slab rate, the same as bank interest. It is taxed as it accrues, not only when you receive it. Tax is deducted at source by the issuer.
That changes the comparison. In the 30% bracket, a 9% deposit nets you roughly 6.3%. Run the number for your own slab with the FD calculator and the TDS on FD calculator before you decide the extra yield is worth the missing insurance.
Frequently asked questions
Are corporate fixed deposits safe?
They are not insured. Bank deposits carry DICGC cover to ₹5,00,000 per depositor per bank. An NBFC deposit carries none, and RBI does not guarantee repayment. Safety rests on the issuer alone.
What is the highest rate an NBFC can offer?
12.5% a year. RBI’s Master Direction bars any deposit-taking NBFC from inviting, accepting or renewing a public deposit above that rate.
Can I break a corporate FD early?
Not in the first three months, except on the death of the depositor. After six months a premature withdrawal is allowed, with interest cut by two to three percentage points below the contracted rate.
How long can a corporate deposit run?
Between 12 and 60 months. An NBFC cannot accept a public deposit repayable on demand, and cannot go beyond five years.
Does a AAA rating make a deposit safe?
It makes default less likely on the agency’s assessment. It is not insurance and it is not a guarantee. Ratings get downgraded, sometimes quickly, and your deposit is locked in when they do.
Sources
- Reserve Bank of India, Master Direction – Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016. https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10563 — read 6 September 2026.
- Credsir bank deposit rate tracking, as of 2 October 2026, deposits below ₹3 crore.
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