2 State Government Fixed Deposits Offering 8.5% Interest, Should You Invest?

The two government enterprises of the state of Tamil Nadu, the Tamil Nadu Power Finance and Infrastructure (Tamil Nadu Power Finance) and Tamil Nadu Transport Development Finance Corporation (Tamil Nadu Transport Development) are offering an interest rate of 8.5% for senior citizens and 8% for individuals.

Finer details of the deposits of Tamil Nadu Power

Now, as mentioned earlier, both the deposits are from the state government, so default chances are virtually zero. The service aspect for online transactions and opening an FD online with Tamil Nadu Power Finance is simply superb. In fact, the website is great and the app of the company has a very user friendly interface.

Cumulative deposit interest rates of TN Power Finance

	Senior Citizens	Non Senior Citizens
12-months	7.25%	7.00%
24-months	7.50%	7.25%
36-months	8.25%	7.75%
60-months	8.50%	8.00%

We believe that the interest rates from a government owned institution is unmatched and these deposits are safe as well. The 60-months deposit for senior citizens fetch an interest rate of 8.50% which is not bad at all. The above is for cumulative and hence with the compounding the yields can go significantly higher for these deposits.

There is a periodic payment for quarterly as well as monthly payment as well.

Monthly payout interest rates for Tamil Nadu Power

	Senior citizens	Individuals
36-months	8.25%	7.75%
60-months	8.50%	8.00%

Tamil Nadu Transport Development Finance Corporation Fixed Deposits

The interest rates on the Tamil Nadu Transport Development Finance Corporation also matches that of TN Power Finance. However, we prefer Tamil Nadu Power as there is an ability to invest in the deposits online. In any case here are the interest rates of these deposits.

Interest rates on the Tamil Nadu Development, periodic interest payment (quarterly payment)

	Senior citizens	--Non Senior Citizens
12-months	NA	NA
24-months	7.50%	7.25%
36-months	8.25%	7.75%
60-months	8.50%	8.00%

It is important to note that the company does have monthly and yearly option as well, where the interest rates on the monthly deposits are slightly lower than the yearly and quarterly rates. Those who are retired may well want to choose the monthly rates for investment and regular income.

Conclusion

We believe this is the best interest rate that investors would get from any bank or institution presently. The interest rates look unmatched and there is an online facility for Tamil Nadu Power Finance. According to the company's website a staggering sum of Rs 34,748 crores is the value of deposits at the company, with as many as 1233017 online transactions done. As far as Tamil Nadu Transport Development is concerned it does not have facility for online transactions. This means the only option would be the send the documents across to the company.

There is another state owned entity called the Kerala Transport development Finance Corporation. They too accept deposits, but, the interest rates here are very low at around 6%. At the moment in terms of company deposits there would be no company that is offering these interest rates. Shriram City Union and the recently opened Hawkins Cookers are slightly lower than the ones mentioned above.