NBFC Fixed Deposit: No DICGC Cover, 12.5% Cap, 12–60 Months. RBI’s Safety Checklist

“It’s a fixed deposit, so it must be as safe as a bank FD.” That assumption is the most common mistake people make with an NBFC fixed deposit. Company deposits from NBFCs often pay more than bank FDs, but they work under different rules. The biggest difference: DICGC deposit insurance does not cover them. The RBI’s own FAQ on NBFCs, updated on 15 September 2026, spells out what is allowed and what checks you should run first. Here is that checklist in plain words.

NBFC fixed deposit vs bank FD: the key differences

Source: RBI, “All you wanted to know about NBFCs” FAQ, updated 15 Sep 2026; DICGC for the bank cover.

The RBI FAQ is direct about it: the deposit insurance facility of DICGC is not available to depositors of deposit-taking NBFCs. If the company fails, there is no ₹5 lakh safety net (see our DICGC deposit insurance explainer for how bank cover works).

Why NBFC deposits pay more

Higher rates are compensation for higher risk and no insurance. An NBFC also raises money at a higher cost than a bank, which can take deposits in savings and current accounts. When you compare, say, 7.5% at an NBFC with 6.30% at a bank for 3 years, ask whether the extra 1.2 points or so is enough for the risk you are taking. On ₹2 lakh, a 1.2-point gap is about ₹2,400 a year before tax. The whole ₹2 lakh is what is at risk if things go wrong.

The RBI has not issued a deposit-taking licence to any new NBFC since 1997, its FAQ says, as a matter of public policy that only banks should take public deposits. So the list of deposit-taking NBFCs is limited, and any company outside that list asking for “deposits” should set off alarm bells.

The RBI’s NBFC fixed deposit checklist

The RBI FAQ lists the precautions a depositor should take. In simple terms:

1. Check the RBI list. The NBFC must be registered with the RBI and specifically authorised to accept deposits. The list is on rbi.org.in under Regulation → Non-Banking. Being a registered NBFC is not enough; it must be a deposit-taking one.
2. See the Certificate of Registration. NBFCs must display the CoR at their place of business, and it should show the deposit-taking authorisation.
3. Check the credit rating. The NBFC needs at least an investment-grade rating (BBB− or above). A higher rating, such as AAA or AA, signals lower risk; a downgrade is a warning sign.
4. Check the rate. Anything above 12.5% is above the RBI cap and a red flag.
5. Check the tenure. Deposits must be for 12 to 60 months. A scheme offering deposits repayable on demand or for 3 months is outside the rules.
6. Get a proper receipt. The RBI says it should be signed by an authorised officer and show the date, your name, the amount in words and figures, the rate, and the maturity date and amount.
7. Check the agent. If a broker or agent collects the deposit, confirm the NBFC has authorised them.
8. Remember it is unsecured. The RBI FAQ reminds depositors that public deposits with NBFCs are unsecured.
9. Read the terms. Premature withdrawal rules, nomination and payout options vary by company.

Red flags to watch for

• Partnerships and proprietors asking for deposits: the RBI FAQ says unincorporated bodies are prohibited from accepting public deposits. If a firm or individual “takes FDs”, it is illegal.
• “RBI-approved” claims without proof: falsely claiming RBI regulation to collect money is illegal, the FAQ notes. Verify on the RBI list yourself.
• Jewellery shop instalment schemes: whether these count as deposits depends on their structure; the RBI FAQ discusses this separately. Read the scheme’s terms closely.
• Chit funds: chit subscriptions are not deposits. Chit funds are prohibited from taking deposits from the public (except shareholders).
• Unusually high returns: anything far above market rates, paid monthly, with pressure to sign quickly.

How much to put in an NBFC fixed deposit

There is no rule, but some practical limits may help:

• Keep your emergency fund and near-term goal money in bank deposits, which carry DICGC cover.
• Spread NBFC deposits across more than one company rather than putting everything in one.
• Prefer shorter tenures if you are unsure, since you can reassess when the deposit matures.
• Track the rating each year. A downgrade is a cue to not renew.

For most savers, a bank FD ladder (see our RD vs FD guide for the basics) forms the core, with NBFC deposits at most a smaller add-on.

If an NBFC delays or defaults on repayment

The RBI FAQ sets out the routes:

Our RBI Ombudsman complaint guide walks through the CMS filing. If the RBI finds an NBFC breaking its rules, it can bar the company from taking more deposits and from selling its assets.

Short answers to common questions are below.

FAQs

Is an NBFC fixed deposit insured by DICGC?

No. The RBI FAQ states that DICGC deposit insurance is not available to depositors of NBFCs.

What is the maximum interest an NBFC can pay on deposits?

12.5% a year at present, as per the RBI FAQ, with interest paid or compounded no more often than monthly.

Can I open an NBFC fixed deposit for 6 months?

No. NBFC deposits must be repayable after 12 months and not later than 60 months.

How do I check if an NBFC can take deposits?

Look it up in the list of deposit-taking NBFCs on rbi.org.in under Regulation → Non-Banking, and check its Certificate of Registration.

Takeaway: An NBFC fixed deposit can pay more than a bank FD, but it has no DICGC cover. Check the RBI list, the rating, the 12.5% cap and the 12–60 month tenure before you invest, and keep it to money you can afford to have at risk.