Review of 12% Interest on FD using 12% CLUB App

I have invested a few amounts in the UNI app which provides me 9% interest rate flat. Recently a friend of mine introduced to me the 12% CLUB app. It provides 12% interest on your deposits for any time you want to stay in.
Was looking out for the 12% club app reviews, whether its true or fraud. It’s owned by BharatPe as it shows in app developer.

Very risky.

My friend had a very bad experience when he used 3rd party lending apps like this

It’s better to avoid in my view.


I agree with Vikram, we need to be very cautious before committing our money to such apps.


What is your risk taking capability - are you ok with the rate of 12% and take a chance on your capital? If you are ok with capital loss then these apps are ok.

Do these apps tell you where they are going to invest?

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Its not just about loss of capital Neha ji. Data privacy issues and calls from spammy entities becomes 10x more once we take a loan from these apps.


About the loan apps, pls watch this short documentary about the horrors that have happened to thousands of people in India…

Even if one is willing to take the risks, I would suggest that they should look for better alternatives. These apps look unreliable to me and I would not put my money into them.

Thanks and regards.

For example, you may checkout few of the Corporate Bonds given in the following link -

Not all of them are safe, but I would think that they would be better then such apps overall, specially if they have a proven track record of paying regularly on time.

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Well, my query was about interest on FDs but not regarding loan, which I don’t need in any case.

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Safe Corporate bonds = Interest of Bank’s FD.
I am not asking for more interest rates but looking for one that could beat inflation.
Currently, I have invested in UNI app which provides 9% interest to me annually.
That’ looks safe to me.

Hi @yogeshkhetani ,

Firstly, there is no concept of FDs here, not with 12% Club atleast. I am assuming you are already aware as to what the 12% Club is and how they intend to make money.

Their FAQ section on states the following:
“Please note that we along with our P2P NBFC partner try to minimize risks by undertaking stringent verification and credit underwriting process. Further, peer to peer lending is unsecured and even after a rigorous process, we do not guarantee risk-free returns or no defaults. However, we have a soft recovery and collection process in place to ensure minimal defaults.”

I am certain this is very loosely worded and you will find more water-tight covenants in their agreements where essentially you will not have much recourse other than pursuing legal action which comes with its own bundle of costs (not limited to financial costs).

At this point it is less about whether someone is a fraud or not but more about what you intend to benefit and at what terms. Simply because a business does not pan out does not make it a fraud.

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Thank you joyesh, for sharing these valuable points with us. This should definitely not to be compared with Bank FD etc. in any way.

And I also agree that if a business does not pan out, then we should not call them a fraud, but still we need to keep our eyes open and do not fall for good marketing tricks, in which they make it look like a safe FD type of investment to the laymen who does not have the eye to look into the details and the fine print.

The point is that
to provide an investor N% returns,
these NBFCs need to generate >N% revenue from their activities.

In the recent years a major source of revenue for such NBFCs
has been shady “creative” lending tactics :smiling_imp:
that prey on the financially weak/naive folks.

Here’s a somewhat detailed case-study - How did a Zero-Interest EMI loan generate 1400% APR returns.

Ethics and legality aside,
as an investor, what one needs to ask oneself is
if one’s invested capital is used to provide such loans,
if/when a significant percentage of individuals will start defaulting on such NBFC loans?
(and that’s the risk-assessment one needs to carry out before investing in such NBFCs)

There’s also another aspect to consider when investing in NBFCs.
NBFCs often raise a significant chunk of the capital for their activities using bonds.
Such bonds are usually of relatively short duration.

To maintain their cash-flow/liquidity,
and to service any longer-duration loans provided by the NBFCs to their customers/borrowers,
NBFCs will periodically need to float new series/tranches of bonds
to pay back the previously floated bonds that are now maturing.
(i.e. to pay back the capital of previous investors).

This is the inherent risk due to mismatch in the duration of…

  • …the NBFC’s assets (any longer duration loans they have given out),
  • …and the NBFC’s liabilities (the shorter duration bonds they have floated to raise their working capital).

Nothing fundamentally wrong with this approach.
This is prevalent in banking and formally know as an Asset-Liability mismatch and is measured as a Duration Gap.

However, one needs to pay attention to the amount of capital being raised periodically by the NBFC using such bonds.
Floating larger and larger bond IPOs to pay back previous investors with capital raised from subsequent Bond IPOs is a Ponzi scheme. Here’s a discussion on this topic and other related risks of NBFC bonds.


Thanks for writing a long text.

Those who take a 7, 30 days loan from NBFC charge nothing less than 20% to 30% interest if not paid on time at 12% interest. That’s the case with all these apps on Android/iPhone in India.
Some loans become default, and they know a certain percentage will happen like this.
This doesn’t guarantee that 12% interest on the deposit is beneficial to customers and by checking reviews people have some or the other problems while withdrawing.