Interest rates in the economy have fallen in the last one year. Investors can no longer get high interest rates. For example, up until last year, the government of Kerala controlled, KTDFC was offering interest rates of up to 10 per cent. That is no longer the case. They have now dropped interest rates to 8.75% per annum. A drop in interest rates on company deposits, hits retired folks the hardest.
Bajaj Finance Fixed Deposits
The interest rates on Bajaj Finance Fixed Deposits is one of the best in its categories for highly rated company deposits. This Company Fixed Deposit comes with FAAA/Stable rating by CRISIL and MAAA (Stable) rating by ICRA.
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Senior citizens are being offered an additional interest rate of 0.25 per cent, over and above the interest rate for the general public.
KTDFC Fixed Deposits
This is a government of Kerala controlled company, which ensures that your deposits are relatively safe.
Senior citizens are offered an interest rate of 9 per cent on the fixed deposits of KTDFC. The fixed deposits are guaranteed by the govt of Kerala, which is good, since company deposits are risky, as compared to bank fixed deposits.
KTDFC is largely engaged in retail finance, primarily involving automobiles. It grants personal loans, as well as loans for 2-wheeler, 3-wheeler and 4-wheelers.
Mahindra Finance Fixed Deposit
Mahindra Finance is a part of the Mahindra Group. The interest rates on the fixed deposits, can fetch you a yield of as much as 10 per cent. The interest rates are pegged at 8.45 per cent, which is a good 75-100 basis points, more than what most banks in the country are offering.
The deposits are rated by Crisil with a rating of 'FAAA'. This is the best rating that can be accorded.
Taxation on company deposits
Company deposits will attract a TDS or tax deducted at source, if the interest income crosses Rs 5000. Bank deposits on the other hand attract a TDS only if the amount crosses Rs 10,000. If you are not paying income tax, then it would be better to handover your form 15g form 15h, as the case maybe to avoid TDS.
Another important thing to be noted, is that company FDs are risky. Therefore, you should only invest in deposits that are highly rated and companies that have a strong pedigree. All of the above are strong companies with a good track record.