Interest rates are likely to move lower in the next couple of months, as the RBI may cut interest rates on benign inflation data. It is hence advisable to lock money in high yielding Fixed Deposits. While looking at some of the high yielding FDs below, we have largely selected company FDs and those from among the small finance banks, as these offer superior returns. Since these banks are regulated by the RBI, they can be considered to be reasonably secure.
Jana Small Finance Bank
This bank offers an interest rate of 9 per cent on a tenure of three years. The annualized yield on the deposit works to around 10.20 per cent for three years.
Senior citizens are entitled to an interest rate of 9.60 per cent, with the yield on the three year deposit moving as high as 10.67 per cent. The one year deposit fetches an interest rate of 8.50 per cent and 9.10 per cent for senior citizens.
Jana Small Finance Bank is a small finance bank, based out of Bangalore. As mentioned earlier, these banks are approved by the RBI.
Fincare Small Finance Bank
This is another small finance bank, with pretty decent interest rates. The bank offers an interest rate of 9 per cent for the general public and 9.50 per cent for senior citizens on 24 months 1 day to 36 months deposit.
The 21 months 1 day to 24 months deposit offers an interest rate of 8.75 per cent, which is marginally lower. Investors get a decent return, which is much higher when compared to commercial deposits in the country. Most other commercial banks offer a maximum interest rate of 8 per cent. This is a good bet from a long term perspective.
Mahindra and Mahindra Financial Services
This is not a small finance bank, but, an NBFC. The deposits of the company are AAA rated, offering a good amount of security.
For online investors, the company offers an interest rate of 9 per cent over 36 months. We wish to emphasize once again, that this rate of interest is only for online investors. Those opting for the FD option through the physical mode would be entitled to an interest rate of 8.80 per cent only.
The deposits can be considered as safe, largely because they come from the Mahindra Group stable, known for its solid pedigree.
This is yet again, a AAA rated deposit with the solid backing of the Bajaj group. The 36-60 months deposit comes with an interest rate of 8.75 per cent. The 12-23 months deposit comes with an interest rate of 8 per cent.
For those looking at safety and returns that are much superior to bank deposits, this is a good option that one can consider. One can also consider the non cumulative scheme with periodical interest rates.
Kerala Transport Development Finance Corporation(KTDFC)
This is a government of Kerala enterprise and the deposits are backed by the government of Kerala. The deposits fetch an interest rate of 8.50 per cent on a cumulative basis. This too can be considered as highly safe. The compounding too takes place monthly, which ensures a higher yield.