What do the new RBI guidelines for NBFCs require?

NBFCs must pay back 100% of the deposit amount if requested due to an emergency, but no interest will be paid for premature withdrawals.

What is the TDS limit for NBFC FD?

TDS is deducted if interest exceeds ₹5,000 per year for NBFC fixed deposits. PAN submission is mandatory to avoid higher TDS rates.

What are the disadvantages of NBFC?

NBFC deposits are not covered by DICGC insurance like bank FDs. They may also carry higher default risk compared to scheduled banks.

Is it safe to invest in NBFC FD?

NBFC fixed deposits can offer higher interest rates than banks but carry slightly higher risk. Safety depends on the credit rating and financial strength of the NBFC.

Can NBFC accept fixed deposits?

Yes, RBI-registered NBFCs meeting eligibility norms can accept public deposits. They must comply with Reserve Bank of India regulations.

What is the 50 50 rule for NBFC?

The 50-50 rule refers to the principal business criteria where financial assets must be more than 50% of total assets and income from financial assets must be over 50%.

Which SIP gives 40% return HDFC?

No SIP guarantees 40% returns. Returns from HDFC Mutual Fund schemes depend on market performance and risk profile.

Which 3 banks are too big to fail?

In India, large public sector banks like State Bank of India, HDFC Bank, and ICICI Bank are considered systemically important.

Which bank gives 9.5% interest on FD in India?

Smaller finance banks or select NBFCs may offer around 9–9.5% during special schemes. Rates vary and should be verified before investing.

Which bank gives a 9.5 interest rate in India?

Interest rates change frequently; some small finance banks occasionally offer near 9.5% for specific tenures. Always check the latest official rates.

What will be 1 lakh FD after 5 years?

At 7% annual interest compounded yearly, ₹1 lakh becomes approximately ₹1.40 lakh in 5 years. Final amount depends on the actual interest rate.

Is it safe to keep FD in Bajaj finance?

Bajaj Finance Limited FDs are highly rated and popular, but they are still NBFC deposits and not covered by bank deposit insurance.

Who is the no. 1 NBFC in India?

By market size and reputation, Bajaj Finance is often considered among the top NBFCs in India. Rankings may vary based on assets and profits.

Is it good to take a loan and invest in FD?

Generally no, because loan interest rates are usually higher than FD returns. This strategy may result in guaranteed loss unless there is a specific arbitrage case.

Is NBFC better than bank?

Banks are safer due to deposit insurance and stricter regulation. NBFCs may offer higher returns but come with relatively higher risk.

Which SIP gives 40% return HDFC?

No SIP guarantees 40% returns. Returns from HDFC Mutual Fund schemes depend on market performance and risk profile.

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Investing in FDs with an NBFC? Check New RBI Guidelines On Withdrawing From NBFCs

Q: How is an emergency defined under the new guidelines?

An emergency is defined by the Insurance Regulatory and Development Authority of India (IRDAI) as 'critical illness.'

Pragya Pathak

Author

Updated: 28-02-2026 at 3:30 PM

Serving Over

500K+ Users

The Reserve Bank of India recently released a circular prescribing new guidelines for Non-Banking Financial Institutions (NBFCs) and Housing Finance Companies (HFCs). The Apex Bank of the country has mandated that the NBFCs will have to pay back 100% of the deposit amount in case the depositor asks for it, citing an emergency.

However, no interest will be payable on the deposit withdrawn as a premature withdrawal. Furthermore, the depositor can only withdraw the amount within the first three months of depositing.

RBI has further stated that whether or not a situation constitutes an emergency will be determined by referring to the definition of ‘critical illness’ set by the Insurance Regulatory and Development Authority of India (IRDAI). These new RBI guidelines for NBFC fixed deposits will be applicable from January 1, 2025.

Read the article to learn more about the new regulations released by the RBI concerning new NBFC FD interest rates and rules, and information on safe fixed deposit options India.

Overview

The table below summarises some key information about the new guidelines that one should know.

Rules issued by	Reserve Bank of India
Applicable for	NBFCs and HFCs accepting public deposits
Implementation date	January 1st, 2025
Guideline concerning emergency withdrawal	Complete refund of the principal amount if the withdrawal is made within 3 months of the deposit in case of a critical illness.
Interest on withdrawal	None payable
HFC liquid asset requirement	Increased to 15% of public deposits
Tenure of deposit for HFCs	Minimum 12 months, maximum 60 months

RBI FD Investment Regulations India

The Reserve Bank of India has revised some components in the guidelines concerning the Non-Banking Financial Institutions and Housing Finance Companies. As per the newly issued guidelines, “In cases of critical illness, 100 per cent of the amount of the principal sum of deposit may be prematurely paid to the individual depositor on request, before the expiry of three months from the date of acceptance of such deposits, without interest”.

The main objective behind this revision to the old guidelines is to increase the level of protection of the depositor while also ensuring that the financial institutions that accept public deposits remain financially stable. The new rules are extremely clear, so that there remains no place for ambiguous interpretations by people.

What If A Withdrawal Is To Be Made Without An Emergency?

RBI has clarified through the new circular concerning NBFC FD withdrawal rules India that if the money is not sought for an emergency and a premature withdrawal is sought within three months, NBFCs can pay up to 50 per cent of the deposit without paying any interest.

However, not more than 50 per cent of the amount of the principal deposit or Rs 5 lakh, whichever is lower, is to be prematurely paid according to the Reserve Bank. The apex banking institution, RBI, has also asked NBFCs to ensure that their audit committees conduct an information system audit.

What Are RBI’s Guidelines For HFCs?

Through the circular, the RBI specified that HFCs shall maintain minimum liquid assets to the extent of 15 per cent of the public deposits. Previously, the assets had to be maintained at up to 13%.

HFCs shall ensure that full asset cover is available for public deposits accepted by them at all times, and ensure that they get the investment grade rating at least once a year.

Home lenders "shall not renew existing deposits or accept fresh deposits thereafter till they obtain an investment grade credit rating," the circular stated.

Public deposits accepted or renewed by HFCs shall be repayable after 12 months or more but not later than 60 months, it said. It has also reformed the rules on branches and appointment of agents to collect deposits, under which HFCs having branches or agents outside the state of their registration shall not accept fresh deposits or renew existing deposits in these branches if they do not meet certain conditions.

NBFC Vs Bank FD Differences

There are several differences between a fixed deposit drawn from a Non-Banking Financial Institution and a fixed deposit drawn from a bank. The differing points are described below in a tabular format:

Component	FD from an NBFC	FD from a bank
Regulatory authority	RBI, but with a separate regulatory framework	Under the RBI’s core banking norms
Insurance on deposit	Not covered	Deposit is insured up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC)
Rates of interest	Usually higher than FDs from banks	Generally lower but stable
Risk	Higher	Lower
Rules concerning premature withdrawal	Strict and rigid rules, especially if withdrawal is made in the initial 3 months of deposit	Comparatively flexible, with some penalties and options of partial withdrawal available

Safe Fixed Deposit Options India

Any individual planning to invest their money in a Fixed Deposit should take into consideration the protection of their deposited money first and then worry about the returns. Some safe fixed deposit options that people can invest in are laid out below for one’s reference:

One of the safest options of Fixed Deposits is offered by public sector banks, like the State Bank of India (SBI), Punjab National Bank (PNB), Bank of India (BOI), etc. as they are public sector banks, they are all under the government of India and operate under the supervision of the RBI. Additionally, the deposits up to Rs 5 lakh are insured under the Deposit Insurance and Credit Guarantee Corporation.
Other safe FD options are offered by private sector banks, like the HDFC Bank, ICICI Bank, Axis Bank, and others. They also operate as the guidelines of the Reserve Bank of India, and the deposit is covered under the DICGC. Private sector banks offer better interest rates than public sector banks and, therefore, are preferred by people who want a slightly higher rate of interest on their investments.
Some fixed deposit options are also offered by Non-Banking Financial Companies, such as Bajaj Finance Ltd, Shriram Finance Ltd, etc. They have high credit ratings and better interest rates; however, the deposit is not insured under the DICGC, and that’s essentially the reason why they are a slightly riskier option when compared to other options for FDs like public or private sector banks.

Also Read: RBI App - Benefits Of RBI's New Mobile Application

Conclusion

The revised and updated Reserve Bank of India’s guidelines concerning Non-Banking Financial Institutions and Housing Finance Companies are a wise decision. The apex bank has clearly defined all the clauses and conditions governing premature withdrawals to eliminate ambiguities and misuse of short-term deposit instruments. Along with this, the RBI has also raised the liquid asset requirement for HFCs to ensure financial stability and accountability.

The newly issued revised guidelines also serve as a reminder to investors that while NBFCs and HFCs' fixed deposits may offer competitive returns, they operate under a different oversight structure than fixed deposits offered by banks. We urge all of you to stay up to date on specifics, such as withdrawal limits, liquidity standards, and interest rates, before investing your money in any FD.

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