2 Replies to “WHY people prefer depositing money in RBI Registered NBFCs than banks?”

  1. Reena,
    I answered an another question on this line. Anyway, here is my take.
    In general, all NBFCs are required to be registered before accepting deposit. The advantages of these pulic deposits is that they generally offer higher rate of interest. Where your bank might offer 7-8% return on your fixed deposit, you may get 10-12% return on these deposits.
    The disadvantage is that the deposits are unsecured. It means that you are bearing the risk of investing as you may loose your money if worst case. So, whether to invest in such instruments or not really depends on your comfort level with the company. In any case, you should invest a small fraction of your money in such instruments. They can add spice to your portfolio.
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