This Mumbai-based start-up is attempting to disrupt the traditional FD segment

Did you know that deposits with banks grew a little over 10 per cent in 2022-23 (FY23) with senior citizens contributing nearly one-fifth of the total deposits with their share pegged at over 22 per cent in the term deposit segment?

This assumes significance as a bulk of India’s household savings still goes into banks and more specifically, fixed deposits that have remained the favourite investment instrument for decades.

Incidentally, while much disruption and digitisation has happened with respect to other investment avenues like direct equity investments and mutual funds, not much has happened in the realm of FDs which are often looked upon as a plain vanilla investment avenue.

A Mumbai-based start-up is now attempting to bring some amount of digitisation and disruption in the FD space by creating a platform where one can compare and invest in FDs across banks without the usual hassle of going through every bank’s website or branch.

Started by Akshar Shah, an XLRI alumnus and a CFA, Fixed Invest is an FD-focussed marketplace that offers investors the opportunity to invest in fixed deposits offered by banks and NBFCs – only those permitted by the Reserve Bank of India (RBI) to accept such deposits.

“Prior to starting Fixed Invest, I was a core strategy team member and product manager in Kotak’s investment tech app called Kotak Cherry. I saw how customers struggled to find safer investment alternatives that also provide a higher return compared to their own bank’s savings account and fixed deposits,” says Shah.

The start-up has already partnered with three corporate non-banking financial companies (NBFCs), two housing finance companies (HFCs), two small finance banks and one private bank to offer FD options.

Further, the venture has also developed a WhatsApp marketplace where investors can find FD options with the highest interest rates easily in the chat application and invest without having to open a savings account with any of the banks.

For instance, a person having an account with HDFC Bank can open an FD with Axis Bank or vice versa without having to open a new savings account with the bank in which the FD is being created.

Moreover, the process is fully digital and paperless with no fees or convenience charges.

“Our flagship product, BetterFD, is the first-of-its-kind FD marketplace where investors can search, compare, and invest in FDs better than their own bank digitally without opening any savings account. With BetterFD, users get access to FDs that maximise returns and secure their financial future,” says Shah who honed his skills for nearly six years in the Kotak Group after getting his management degree from XLRI, Jamshedpur.

The start-up is built on open banking technology that connects various banks and corporates through APIs to offer their products such as FDs to retail investors. While the start-up does not charge any fee from the investors, it earns a commission from its partner banks and corporate entities whom it helps get the deposits.

“Currently, Fixed Invest earns a small commission from partner banks and corporates on the value of the transaction and outstanding AUM with it. Fixed Invest does not charge a convenience fee to the customer for booking FD or have any account opening/maintenance fees,” says Shah.

Interestingly, investors also stand a chance to earn cashback and incentives that the start-up passes on to the customer from the commissions that it earns from its partners.

The start-up was launched only early this year but it is already seeing a good amount of traction as it looks at disrupting the FD arena that is well over ₹100 lakh crore in size with more than 30 crore FD holders in the country.

While we will launch our mobile and web platform by the end of September, through offline and online WhatsApp channels till now, we have already surpassed ₹10 crore of AUM in FY24, says Shah.  

While the start-up has made its entry with FDs, going ahead, it plans to diversify into debt mutual funds and bonds as well while creating a niche for itself in the fixed-income space.

“Our mission is to be India’s largest FD enablers by volume and value. Post-launch, we aim to scale to a volume of ₹100 crore volume in the first six months and aim to enable over ₹50,000 crore in the next five years,” says Shah adding that the next product that the start-up will be innovating is enabling government and PSU bonds as there is enough scope for disruption in that segment.

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