Neobank Fixed Deposits in India 2026: Why Your FD Sits With a Partner Bank, Not the App

By Nitish Bharadwaj · Published Sep 6, 2026 · 6 min

Neobanks like Jupiter, Fi, and Niyo don't hold banking licences themselves — they route your savings account and fixed deposit to a licensed partner bank, and DICGC's ₹5 lakh insurance cover applies to that bank, not the app. Fi Money's banking services wound down in March 2026, moving 3.5 million Federal Bank customers to the FedMobile app with their deposits untouched; Niyo's partnership with Equitas Small Finance Bank ended in June 2025 for the same reason. This guide explains how neobank FDs actually work, what happens if the app shuts down, and what to check before opening one.

Open the FD section inside Jupiter, or what used to be Fi Money, and it looks exactly like a bank's own interest-booking screen — enter an amount, pick a tenure, confirm, done. But no neobank in India holds a banking licence. Every one of them is a technology layer sitting on top of an RBI-licensed bank, and that distinction stopped being theoretical for millions of users in 2026: Fi Money shut down its own banking app in March, and Niyo had already lost its original banking partner the year before. Here's what actually happens to your fixed deposit when the app that sold it to you disappears.

What a Neobank Fixed Deposit Actually Is

A neobank like Jupiter, Fi Money, or Niyo has never been a bank under the Banking Regulation Act — it's a fintech that partners with an RBI-licensed bank, embeds that bank's account-opening and deposit products inside its own app, and takes a cut of the relationship in exchange for a better user experience than the bank's own app usually offers. Open a 'Jupiter FD' and you're not opening a deposit with Jupiter; you're opening a fixed deposit with Federal Bank, through an interface Jupiter built. Jupiter's current fixed deposit product, launched with Federal Bank, advertises returns of up to roughly 7.25% annually — a Federal Bank rate, not a Jupiter one, because Jupiter has no reserve requirement, no banking licence, and no legal capacity to accept a deposit in its own name.

Fi Money's Shutdown Is the Clearest Proof of This

On March 11, 2026, Federal Bank confirmed it was ending its four-year banking partnership with Fi Money, citing a 'business re-alignment,' and roughly 3.5 million customers were redirected from the Fi app to Federal Bank's own FedMobile app. Fi's savings accounts, debit cards, and any fixed deposits booked through the app didn't disappear or lose value — Federal Bank stated explicitly that customer funds remained completely safe and accessible at all times. What ended was the interface: the Fi app itself, not the underlying deposit sitting at Federal Bank. Fi's own consumer banking business, reportedly running at a steep loss after four years and well over $100 million in capital deployed, simply stopped making sense to continue, and the company pivoted toward enterprise AI work instead.

Niyo's Equitas Split Was the Same Story, a Year Earlier

Niyo went through an almost identical transition before Fi did. NiyoX, Niyo's original savings and FD product, ran on Equitas Small Finance Bank and offered savings interest as high as 7%. Effective June 1, 2025, that partnership ended, and NiyoX users could no longer access their Equitas accounts through the Niyo app at all — Equitas moved existing customers onto its own 'Equitas 2.0' app instead. Niyo's current flagship product, Niyo Global, now runs through a different pair of partner banks, DCB Bank and SBM Bank India. Two of India's best-known neobanks losing their original banking partner within a year of each other isn't a coincidence worth dismissing — it's the ordinary risk of a model where the app and the bank are two separate companies with two separate sets of incentives.

DICGC Cover Follows the Bank, Not the App

Deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC) covers up to ₹5 lakh per depositor, principal plus interest combined, and that cover attaches to the licensed bank holding your money, never to the neobank app used to open it. Hold a Jupiter FD and a separate Federal Bank FD opened directly, and both sit at the same bank, sharing a single ₹5 lakh cover between them, not ₹5 lakh each. The same logic applies if money is split across two different neobank apps that happen to route to the same underlying bank — check the partner bank's name in the app's terms and conditions or FAQ section, not the neobank's marketing page, before assuming a different app means a separate DICGC limit.

None of this makes a neobank FD unsafe — Fi's customers kept every rupee, and Niyo's did too, because deposit insurance and RBI licensing attach to the bank, not the interface built on top of it. What both cases show is that the app is a convenience layer that can disappear with a single corporate decision, while the deposit itself answers to a different, far more heavily regulated entity. Treat the partner bank's name as the fact that actually matters, and the neobank's app as the replaceable way you happen to access it — our comparison of the best high-interest savings accounts and our guide to splitting FDs across banks to manage TDS both work the same way whether the account sits with a bank directly or through a neobank's app.