Online fixed deposit (FD) booking platforms, such as Fixed Invest and Stable Money, allow investors to compare and invest in FDs without needing to open a savings account. While FDs are generally considered safe investments, let’s examine whether these platforms are good enough for you.

About the platforms

Fixed Invest is owned and operated by Fixerra Private Limited. Stable Money is owned by Stable-Alpha Technologies Private Limited. It’s important to note that these platforms don’t hold your money. Instead, they manage deposits by partnering with banks and non-banking financial companies (NBFCs), ensuring that your funds are directly debited to issuers and credited to your bank.

What they offer

Fixed Invest and Stable Money act as marketplaces for FDs. Traditional offline FD investments involve time-consuming paperwork and often include aggressive cross-selling by bank employees. In contrast, these online platforms offer a quick, paperless process after completing online/video KYC, with minimal human interaction.

While some banks also offer FD booking through their websites and apps, this restricts you to the FD options provided by them. Dedicated FD platforms, on the other hand, enable you to open FDs in various banks, based on availability.

What’s available

These platforms allow you to compare interest rates from numerous RBI-regulated financial institutions, including banks and NBFCs. However, as of now, you can only book FDs with a limited number of institutions, with more likely to be added in the future.

Stable Money offers FD options from issuers such as Utkarsh Small Finance Bank, Shriram Finance, Shivalik Small Finance Bank, Bajaj Finance, Axis Bank, and South Indian Bank. Fixed Invest offers options from AU Small Finance Bank, Fincare Small Finance Bank, Bajaj Finserv, Shriram Finance, and Mahindra Finance.

These platforms may offer vouchers for your first FD booking, though these promotions may be limited-time offers. Moreover, booking high-value FDs, such as Rs 1 lakh or more, may offer benefits like higher referrals, rewards, dedicated relationship managers, and early access to future product offerings.

Note that the deposit insurance facility of the Deposit Insurance and Credit Guarantee Corporation is available only for bank FDs and not FDs in NBFCs.

Regulation

The regulatory status of FD investment platforms can be a grey area. These are essentially internet-based asset ownership portals providing technology solutions to access a range of financial products and alternative investment opportunities.

While banks and NBFCs are regulated by the RBI, the companies operating these platforms may not be subject to clear regulations. It’s worth monitoring whether SEBI or other authorities step in to regulate these platforms, especially if they expand into other financial products like debt mutual funds, bonds, or gold bonds.

Our take

Traditional FD investments have historically been limited to one’s own bank. However, these FD platforms empower investors to explore, evaluate, invest in, and monitor FDs across various banks and corporate entities from a single point. Gamification elements, such as visualisations and dynamic calculators, add an engaging aspect to the experience.

As of now, these platforms do not charge any convenience or platform fees. They likely generate revenue by assisting financial institutions in attracting deposits. Smaller and less-known institutions tend to benefit more from such platforms.

Up-selling of fixed income products in future could also generate revenues for them. User data on FDs can also be a critical input for the under-writing process if the companies operating these platforms enter the lending segment in future.

It’s important to note that these platforms may onboard more institutions in the future, but the criteria for selecting them isn’t entirely clear. Curation of FD options should be transparent, fair, and objective to avoid allegations of bias.

In conclusion, online FD booking platforms offer convenience and a broader range of options, making them appealing to investors. However, it’s crucial to stay informed, understand the regulatory landscape, and carefully review the terms and conditions of the FDs offered through these platforms. Your investment decisions should align with your financial goals and risk tolerance.

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