Fintechs go retro, offer FDs to boost top line

Fintech companies are tapping into traditional forms of banking products such as fixed deposits (FDs) as they expand their financial services bouquet.

- AJINKYA KAWALE

New age companies such as Stable Money, Flipkart-backed super.money, and MobiKwik have rolled out such services offering interest rates up to 9.5 per cent per annum across different tenures.

This is the first time that fintechs have evinced interest in FDs.

The offering is extended in partnership with small finance banks, deposit-taking non-banking financial companies (NBFCs), and commercial banks.

These are private partnerships with no separate licensing required from the regulator. However, as the norm goes, FDs are insured up to ₹5,00,000 by the Deposit Insurance and Credit Guarantee Corporation.

The move to add FDs to the financial services menu reflects a strategic effort to broaden revenue streams and demonstrate profitability even as the sector recovers from a funding crunch.

"Firms have started to offer FDs in the past year to ensure they do everything to add revenue to their top line and some may have to demonstrate profitability. Reasons why the trend is picking up is because the rates are good, (equity) markets are volatile and people would want to diversify their portfolio, and the integration of the product with banks is similar to a plug and play," said Saurabh Jain, co-founder, Stable Money.