New Delhi: A fresh wave of fintech startups is transforming fixed-income products to appeal to modern consumers. Startups like Fixerra, Stable Money, and Upswing are partnering with major banks to enhance fixed deposits, recurring deposits, and even issue credit cards secured against these deposits.

While Stable Money focuses on bringing customers directly to banks, Fixerra and Upswing are developing networks that allow banks to offer these products through large consumer-facing applications.

This shift comes as banks intensify their efforts to raise deposits, following a warning from the Reserve Bank of India about potential systemic risks from credit growing faster than deposits. These fintech startups are making term deposits more attractive to young consumers.

Venture investors are also taking note. Stable Money has raised about $10 million and is negotiating another significant funding round. Upswing, based in Mumbai, secured $4.2 million in December, bringing its total funding to around $10 million. Fixerra has raised approximately $2.2 million from angel investors.

Industry insiders highlight the growing potential of these third-party applications, which have facilitated around Rs 4,500 crore worth of deposits, a significant increase from last year. Saurabh Jain, cofounder of Stable Money, explains, “Customers are accustomed to using tech platforms for stocks, credit, and mutual funds. They won't return to traditional methods for fixed income investments; that's where we step in.”

Bangalore-based Stable Money started with fixed deposits and plans to expand into other fixed income investments like bonds. The company already holds an OBPP (Online Bond Platform Providers) license.

This trend has caught on with small finance banks and medium-sized private sector lenders, who are using fintechs to boost their current and savings account balances with higher interest rates. Wealth management platforms like Groww and Angel One have also begun offering fixed deposits. The next phase will see e-commerce players, travel portals, and payment apps integrating fixed deposits.

Since consumer-facing applications cannot partner with multiple banks individually, platforms like Fixerra and Upswing are essential in powering these marketplaces.

Unlike many fintech offerings, these fixed-income products generate revenue, as banks are willing to pay commissions to customer acquisition channels. This approach provides banks with term deposits at a lower cost compared to traditional branch networks or mobile banking channels.

The sector is expected to grow rapidly once the top five to six lenders start using these fintech channels to attract deposit customers.

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