Looking beyond bank FDs? NHAI bonds with yield more than 8% per year in offing

By: | Published: August 9, 2018 4:25 PM

Union Transport Minister Nitin Gadkari said yesterday that National Highways Authority of India proposed bonds will earn a much better return than bank savings. The proposed bonds will offer more than 8% per annum.

The bank FDs have been yielding about 7% per annum currently.

In a bid to channelise small savings towards the infrastructure sector, Union Transport Minister Nitin Gadkari said yesterday that National Highways Authority of India proposed bonds will earn a much better return than bank savings. In a function organised in new Delhi to mark the 25 years of NSE’s (National Stock Exchange) existence. In his speech, Gadkari said that yield on NHAI bonds could be higher than 8%, wooing retail investors. “We will give you a better yield than bank savings,” he said. In the previous year 2017-18,the body had raise about Rs 52,000 crore . In the current year, NHAI looks to raise about Rs 62,000 crore.

The bank FDs have been yielding about 7% per annum currently. The highest interest rates offered by most major banks are hovering around 7% per annum currently. However, the rates offered by smaller banks can go up to 9% p.a. The country’s major private sector lender HDFC Bank has increased its interest on fixed deposit.

After the latest revision in rates, HDFC Bank is now offering 7.25% interest rate on deposits below Rs 1 crore for a 1 year period, up from 6.85% earlier. For senior citizens, the rate is 50 bps higher at 7.75% from 7.35% earlier. For term deposits of 3 years 1 day to 5 years too the rates have been hiked. The bank is now offering 7.10% interest as against 7% earlier, while for senior citizens, the rate has now been revised to 7.60% as against 7.50% earlier.

Notably, the interest income earned from fixed deposits is taxed as per the tax-slab of the depositors. However, senior citizens earning fixed deposit interest income of up to Rs 50,000 in a specific financial year qualify for tax deduction under Section 80TTB. Apart from bank FDs, a few companies have also come out with NCDs (Non-convertible Debentures). Currently, Edelweiss ECL Finance’s non-convertible debenture (NCD) is open ffor subscription. The interest rate on offer for different tenors range between 9.25-9.85% per year. It comes with  maturities ranging from 3, 5 and 10 years. The issue is slated to remain open till August 16.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition