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

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

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.

By: | Published: October 9, 2018 2:28 PM
Bank FDs, NBFC FDs, corporate deposits, Post Office deposits, risk-free investments, risk-averse investors, safe investments, fixed deposits The 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 Name Tenure Interest Rate (p.a.) in %

Regular

Senior Citizens

Axis Bank 7 days – 10 years

3.50 – 6.90

3.50 – 7.15

Bank of Baroda 7 days – 10 years

4.25 – 6.60

4.75 – 7.10

Bank of India 7 days – 10 years

5.25 – 6.25

5.25 – 6.75

Canara Bank 7 days – 10 years

4.20 – 6.00

4.70 – 6.50

Central Bank of India 7 days – 10 years

4.75 – 6.50

5.25 – 7.00

HDFC Bank 7 days – 10 years

3.50 – 6.00

4.00 – 6.50

ICICI Bank 7 days – 10 years

4.00 – 6.50

4.50 – 7.00

State Bank Of India 7 days – 10 years

5.75 – 6.75

6.25 – 7.25

Yes Bank 7 days – 10 years

5.00 – 7.00

5.50 – 7.50

Top FD interest rates offered by NBFCs:

Company Name Tenure Interest Rate (p.a.) in %
Regular Senior Citizens
HUDCO 1 year

9.15

9.4

HUDCO 2 years to 3 years

9

9.25

Kerala Transport Development Finance Corporation Ltd (KTFDC) 1 year

8.25

8.5

Shriram City Union Finance 1 year

7.5

7.75

LIC Housing Finance Ltd 1 year

7.3

7.4

Sundaram Home Finance 3 years

7.25

7.7

Mahindra Finance 3 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 Name Interest Rate (p.a.) in %
1 Year 2 Year 3 Year 4 Year 5 Year Additional for Sr. CT
Bajaj Finance Ltd 8 8.15 8.5 8.5 8.5 0.35 (up to Rs 1 crore)
DHFL Aashray Deposit Scheme 13 Months-Trusts Only 8.15 0.4
DHFL Swayamsidha(18 Months) – Exclusively for females 18 Months- 8.30 0.4
DHFL-Aashray Deposit Plus 8.15 8.4 8.7 8.7 8.7 0.4
HDFC -Premium Deposits 8.03(15M) 8.14(22M) 8.08(30M) 8.14(44M) 0.25
HDFC Ltd. 7.98 7.98 7.98 7.98 7.98 0.25
LIC Housing Finance Ltd. 7.55 7.65(18 M) 7.65(24M) 7.7 8.1 0.25
Mahindra and Mahindra Financial Services Ltd 8 8.35 8.5 8.5 8.5 0.25
PNB Housing Finance 7.95 8.1 8.35 8.4 8.45 0.25
Shriram City Union Finance Ltd 8 8.3 8.75 8.75 8.75 0.25
Shriram Transport Finance UNNATI Scheme 8 8.3 8.75 8.75 8.75 0.25

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:

Instruments Interest 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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