Bank FDs vs NBFC FDs vs corporate deposits vs Post Office deposits: Options for investors who want safety

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Published: October 9, 2018 2:28:10 PM

The interest rates offered by NBFCs are generally higher than that of banks. Senior citizens also get higher rate of return than what younger people get.

Bank FDs, NBFC FDs, corporate deposits, Post Office deposits, risk-free investments, risk-averse investors, safe investments, fixed depositsThe FD interest rates are generally higher than the rates given on savings accounts balances.

Fixed deposit (FD) is a financial instrument issued by banks or non-banking financial companies (NBFCs) that offers a stipulated return for a fixed time period. The FD interest rates are generally higher than the rates given on savings accounts balances. Moreover, the interest rates offered by NBFCs are generally higher than that of banks. Senior citizens also get higher rate of return than what younger people get.

Top 10 Banks Fixed Deposit interest rates:

Bank NameTenureInterest Rate (p.a.) in %

Regular

Senior Citizens

Axis Bank7 days – 10 years

3.50 – 6.90

3.50 – 7.15

Bank of Baroda7 days – 10 years

4.25 – 6.60

4.75 – 7.10

Bank of India7 days – 10 years

5.25 – 6.25

5.25 – 6.75

Canara Bank7 days – 10 years

4.20 – 6.00

4.70 – 6.50

Central Bank of India7 days – 10 years

4.75 – 6.50

5.25 – 7.00

HDFC Bank7 days – 10 years

3.50 – 6.00

4.00 – 6.50

ICICI Bank7 days – 10 years

4.00 – 6.50

4.50 – 7.00

State Bank Of India7 days – 10 years

5.75 – 6.75

6.25 – 7.25

Yes Bank7 days – 10 years

5.00 – 7.00

5.50 – 7.50

Top FD interest rates offered by NBFCs:

Company NameTenureInterest Rate (p.a.) in %
RegularSenior Citizens
HUDCO1 year

9.15

9.4

HUDCO2 years to 3 years

9

9.25

Kerala Transport Development Finance Corporation Ltd (KTFDC)1 year

8.25

8.5

Shriram City Union Finance1 year

7.5

7.75

LIC Housing Finance Ltd1 year

7.3

7.4

Sundaram Home Finance3 years

7.25

7.7

Mahindra Finance3 years

7.8

8.05

*Interest rates are subject to change and will be revised from time to time

Corporate deposits are also fixed deposits but invested directly to the companies. As investments are made bypassing the financial institutions or banks, the rate of interest is also higher than that of the banks and NBFCs. However, one should check the ratings and financial position of the company to ensure safety of the money to be invested.

Following are the deposit rates of some companies:

Company NameInterest Rate (p.a.) in %
1 Year2 Year3 Year4 Year5 YearAdditional for Sr. CT
Bajaj Finance Ltd88.158.58.58.50.35 (up to Rs 1 crore)
DHFL Aashray Deposit Scheme 13 Months-Trusts Only8.150.4
DHFL Swayamsidha(18 Months) – Exclusively for females18 Months- 8.300.4
DHFL-Aashray Deposit Plus8.158.48.78.78.70.4
HDFC -Premium Deposits8.03(15M)8.14(22M)8.08(30M)8.14(44M)0.25
HDFC Ltd.7.987.987.987.987.980.25
LIC Housing Finance Ltd.7.557.65(18 M) 7.65(24M)7.78.10.25
Mahindra and Mahindra Financial Services Ltd88.358.58.58.50.25
PNB Housing Finance7.958.18.358.48.450.25
Shriram City Union Finance Ltd88.38.758.758.750.25
Shriram Transport Finance UNNATI Scheme88.38.758.758.750.25

Post Office deposits fall under small saving schemes of the government and apart from attractive interest rates, also enjoy sovereign guarantee and tax benefits in most instruments.

Here is the comparative table of the revised rates of interest on various small savings schemes for FY 2018-19:

InstrumentsInterest Rates (Q1/Q2 of 2018-19)

Interest Rates (Q3 of 2018-19)

Compounding

Savings Deposit (SD)

4.0

4.0

Annually

1 Year Time Deposit (TD)

6.6

6.9

Quarterly

2 Year Time Deposit (TD)

6.7

7.0

Quarterly

3 Year Time Deposit (TD)

6.9

7.2

Quarterly

5 Year Time Deposit (TD)

7.4

7.8

Quarterly

5 Year Recurring Deposit (RD)

6.9

7.3

Quarterly

5 Year Senior Citizens Savings Scheme (SCSS)

8.3

8.7

Quarterly and Paid

5 year Monthly Income Scheme (MIS)

7.3

7.7

Monthly and Paid

5 Year National Savings Certificate (NSC)

7.6

8.0

Annually

Public Provident Fund (PPF) Scheme

7.6

8.0

Annually

Kisan Vikas Patra (KVP)

7.3*

7.7**

Annually

Sukanya Samriddhi Account Scheme (SSAS)

8.1

8.5

Annually

*will mature in 118 months / **will mature in 112 months

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