Fixed deposits of non-banking financial companies (NBFCs) and even small finance banks (SFB) may become more attractive after last week’s repo rate hike. Depositors should thus spread their investments across one- to three-year tenures to take advantage of potential hikes in interest rates over the next few months. Bajaj Finance and Shriram Finance have already increased their one, three and five-year fixed deposit rates by up to 40 basis points (bps). For one-year FD, Bajaj raised the interest rate to 6.8% from 6.6% and for three- and five-year deposits to 7.75% from 7.40%. As State Bank of India or Punjab National Bank is offering 6.3% for a three-year tenure, the rate differential is 145 bps. If more NBFCs join the race, depositors will gain. In fact, the rate differential widens to 265 bps if compared with Muthoot Capital Services which is offering 8.95%.