PNB Housing Finance Fixed Deposit: A super yield of 15.06 per cent per year

Investment

oi-Sunil

By Sunil Fernandes

Published: Saturday, September 20, 2014, 7:08 [IST]

The PNB Housing Finance fixed deposits is among the few company fixed deposits that is offering a deposit for a tenure of 10 years. You seldom hear that in a company fixed deposit and a 10-year tenure is more popular among bank deposits.

A look at the features of the PNB Housing Finance fixed deposit

The deposit of PNB Housing Finance offers a yield of almost 15.06 per cent over a 10-year period. The interest rate works out to 9.4 per cent annually and when you compound the rate half yearly, the yield is 15.06 per cent. If you look to invest in the deposit for a long term period of almost 10 years, the deposits are very safe. PNB Housing Finance is a subsidiary of Punjab National Bank, a government majority owned bank and hence the deposits are relatively secure.

A quick snapshot of PNB Housing Finance FD

1. AAA rated company deposit by CRISIL

2. No TDS on interest income up to Rs 5000.

3. Loan available on the fixed deposit. Around 75 per cent of loan available from PNB Housing Finance and PNB Branches.

4. Nomination facility allowed.

Our take on the deposits

The 10 years deposits are suitable for those looking at a very long term. Interest rates in the economy are headed lower and hence investing in the deposit maybe a good idea, as you would be locking money in a deposit for the long term.

Inflation in the economy is falling and in all probability the Reserve Bank of India may cut interest rates going forward. This makes the deposits a good bet against falling interest rates. You would have locked-in at higher rates should interest rates keep falling.

A good time to buy the fixed deposit for the long term, especially considering the good yields.

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