Money Jun 6, 2013
When you deposit money with a bank, you are also investing trust in the bank. Apart from the rate it offers, when choosing a bank you also look atthe credibility attached to its brand. But what about NBFCs? With NBFCs making headlines for all the wrong reasons, is there a checklist you could follow before depositing your money with an NBFCs?
According to a recent RBI notification, there are a few points that investors should look into before making such deposits.
1) Check if the NBFC you have decided to park your money with is authorised by the RBI to accept deposits. You could do so by checking the apex bank's website.
2) Check whether the NBFC has a certificate of registration displayed on its website. There is a good possibility that such a certificate is not displayed at all. Keep in mind, it could also be because it has applied for one from the RBI and is till waiting for it.
3)Check whether the NBFC is offering more than 12.5 percent interest. This is because the central bank has capped the interest rate an NBFC can offer at 12.5 percent. So be cautious, if the NBFC promises a higher rate. But, also keep in mind that the permitted maximum interest rate really depends upon the macro-economic conditions, and hence subject to change.
4)Remember to ask for a receipt after making the payment, always. Not only that, ensure the receipt has an authorised officer's signature, date, your name mentioned, along with the amount and the tenure of the investment.
5) Apart form these, we think you should also look into the credit rating of the NBFC. As a rule, never deposit you money with NFBCs that don't come with credit rating. In fact, we would say, don't invest in any come with a rating lower than "AA".
6) Finally, from the returns point of view, people in zero to 10 percent tax bracket will benefit the most from depositing with NBFCs. Those who fall in the higher tax bracket won't benefit much since they will get lower post tax returns.
To know more about NBFC, clickhere.
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