The very words “Fixed Deposit” (FD) conjure up the image of a bank in the mind since banks and FDs have been inextricably linked down generations in India. However, FDs are also offered by some major companies, which are known as corporate FDs.
Corporate FDs offer almost the same basic features as a bank. One deposits different amounts of money for a pre-determined period of time and gets interest at pre-agreed rates. Some of these companies enjoy the highest degree of rating from agencies. Moreover, some of these companies offer higher interest rates than most banks. FDs are offered in different modes such as cumulative and non-cumulative.
Shriram Finance
Shriram Finance Ltd, set up in 1986, is a reputed deposit-taking company. If a non-senior person opens an FD (cumulative mode) for 12 months it fetches the lowest interest rate of 7.59%. The rates cross 8% when one raises the tenure of investment to and beyond 30 months. The highest rate offered is for 50 and 60-month tenure – 8.47%. Senior citizens get 50 basis points higher rates for all slabs. Also additional 10 basis points are given to all women depositors.
Bajaj Finance
Bajaj Finance is one of the most high-profile companies raising money through FDs from common people. It offers 8.4% interest for non-senior citizens on FDs with a maturity period of 42 months. One can deposit money in it through the web and app only. This is for cumulative deposits. Those above 60 years of age are entitled to an additional interest of 25 basis points. FDs for 33 months and 44 months offer 8.1% and 8.25% interest for non-senior depositors. Also, FDs between 36 and 60 months are paid 8.1% interest (non-senior citizens).
Mahindra Finance
Branded as ‘Samruddhi FD’ these fixed deposits offer interest of 8.10% for 36 months and 60 months. FDs with a maturity period of 48 months are offered 8.05%. These are cumulative schemes. The minimum deposit in these FDs is Rs 5,000 and the maximum investment is Rs 5 crore.
All the FDs cited above have eith AA or AAA rating by agencies such as Crisil, ICRA and India Ratings and Research. One has to keep in mind that TDS (tax deducted at source) is applicable on the maturity payments on these FDs.
Fixed deposits or FDs have an enduring appeal since they offer predictable returns that suit a large number of risk-averse investors. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
