Fixed Deposit Frauds: Tips to Stay Safe and Protect Your Money

Posted on Wednesday, May 14th, 2025 | By IndusInd Bank

Fixed Deposit (FD) have long been a preferred investment option for Indian investors due to safety, assured returns, and stability. However, with the rise of digital transactions and online investments, fraudsters have found new ways to scam innocent investors. From fake FD schemes to unauthorized agents, FD fraud is becoming more common, making it crucial for investors to stay vigilant.

In this blog, we will explore how FD frauds work, common scams to watch out for, how to verify an FD scheme’s authenticity, and essential tips to protect your money.

Understanding Fixed Deposit Frauds

Fixed Deposit frauds occur when fraudsters trick investors into depositing money into fake or unauthorized schemes. These scams often promise higher interest rates, exclusive benefits, or guaranteed returns, making them attractive to unsuspecting individuals.

Scammers use various tactics, such as fake bank websites, impersonation of bank officials, and fraudulent emails or phone calls, to convince investors to deposit their money into fraudulent accounts. Once the money is deposited, the fraudsters disappear, leaving the investor with huge financial losses.

The best way to safeguard your investments is to be aware of these frauds and take necessary precautions before depositing your money.

Also Read: Jump Deposit UPI Fraud: Tips to Safeguard Your Money

Common Types of FD Frauds

Here are some of the most common FD frauds that investors should be aware of:

1. Fake Fixed Deposit Schemes

Fraudsters create fake bank websites, counterfeit brochures, and fabricated online portals to promote fraudulent FD schemes. These schemes promise extraordinary returns, hidden bonuses, or exclusive benefits to lure investors.

2. Fraudulent Agents & Middlemen

Scammers posing as bank representatives or financial advisors approach investors with lucrative FD offers. They claim to offer higher interest rates or exclusive deals, asking investors to transfer funds to private accounts instead of the bank’s official account.

3. Unregistered NBFC FD Scams

Non-Banking Financial Companies (NBFCs) offer FDs, but not all NBFCs are legitimate. Fraudulent NBFCs collect deposits from investors and vanish overnight. Investors should always check if an NBFC is registered with the Reserve Bank of India (RBI) before investing.

4. Phishing & Online Scams

Scammers send emails, SMS, or WhatsApp messages pretending to be from banks. These messages contain fraudulent links that redirect users to fake bank websites where they enter their personal and banking details, leading to identity theft or money loss.

5. Ponzi Schemes Disguised as FDs

Ponzi schemes often mimic FD schemes by promising high returns in a short time. They use money from new investors to pay previous investors, creating an illusion of profitability. Once the fraudsters have collected enough money, they disappear.

Also Read: What is a Fixed Deposit?

How to Verify the Authenticity of an FD Scheme

Before investing in a Fixed Deposit, follow these steps to ensure its authenticity:

1. Verify the Bank or NBFC’s Registration

• Check if the bank is registered with the Reserve Bank of India (RBI) by visiting the official RBI website.

• If investing in an NBFC FD, ensure it is listed in RBI’s authorized NBFC deposit-taking institutions.

2. Check the Official Website & Branch

• Always visit the official website of the bank and cross-check FD details. Avoid clicking on links received via SMS or email.

• Visit the nearest branch and consult a bank official before investing.

3. Cross-Check Interest Rates

• If an FD scheme offers unrealistically high interest rates, it could be a red flag. Compare the rates with leading banks or financial institutions.

• RBI sets a limit on how much interest banks can offer, so any offer beyond the standard rates should be verified.

4. Authenticate Agent Credentials

• If approached by an agent, ask for their employee ID, business card, and other credentials.

• Always make payments directly to the bank or NBFC account, never to an individual’s personal account.

5. Look for RBI Warnings & Customer Reviews

• RBI periodically issues warnings about fraudulent financial entities. Check their website for alerts.

• Read online reviews and investor experiences before choosing a financial institution.

Best Practices to Protect Your FD Investments

To ensure your Fixed Deposit remains safe, follow these best practices:

1. Invest Only in Reputed Banks & NBFCs

• Choose government or RBI-recognized private banks for your FD investments.

• If investing in NBFC FDs, ensure they have a high credit rating from CRISIL, ICRA, or CARE.

2. Never Share Personal Information

• Avoid sharing bank details, OTPs, PAN Card, or Aadhaar Number with unverified sources.

• Banks never ask for OTPs or passwords over calls, emails, or SMS.

3. Always Read the Terms & Conditions

• Carefully review FD tenure, premature withdrawal charges, and renewal policies before investing.

• If an offer seems too good to be true, consult a financial expert before proceeding.

4. Use Official Bank Communication Channels

• Only apply for FDs through bank branches, official bank websites, or net banking portals.

• Report any suspicious messages or calls to the bank’s fraud department.

5. Keep FD Documents Secure

• Maintain proper documentation of your FD receipts, transaction slips, and policy terms.

• Store digital copies safely in a secure online storage or password-protected device.

6. Report Suspected Frauds Immediately

• If you suspect fraud, immediately contact the bank and report it to the RBI.

• File a complaint at the Cyber Crime Portal or call RBI’s helpline on 14440.

Conclusion

Fixed Deposits are one of the safest investment options, but fraudsters are constantly finding new ways to deceive investors. By staying informed and cautious, you can protect your hard-earned money from FD scams.

Always invest through trusted financial institutions, verify FD details before depositing money, and never fall for offers that sound too good to be true. By following the right safety measures, you can ensure that your FD investments remain secure and continue to provide stable returns. If you ever suspect an FD fraud, report it immediately to the concerned authorities to prevent financial loss and help others stay safe.