Interest rates have fallen a great deal and investors are now looking at the best AAA rated deposits to invest in. Rating agencies like Crisil, ICRA and CARE offer ratings to the fixed deposits of companies. This is very necessary since fixed deposits of companies are not secure deposits and in the past there have been numerous companies that have defaulted on payment of principle and interest amounts. Here are seven highly rated company fixed deposits in India.
HDFC Fixed Deposit
The Fixed Deposits from HDFC come with the Highest safety of a AAA rating from both CRISIL and ICRA and have been so for the last 19 consecutive years.
The deposits offer an interest rate of 7.45 per cent to 7.55 per cent, under the cumulative options, which include tenures of 15, 22, 30 and 44 months. This is not bad and is a better proposition than most bank deposits in the country. Go for these AAA rated deposits, if you have a long term perspective.
HDFC is India's largest housing finance company and the deposits are very safe.
The KTDFC deposit, though not AAA rated, offers you an interest rate of 8.25 per cent per annum. This has fallen from levels of 8.50 per cent, which was offered until a few weeks ago.
We have mentioned this deposit, merely because it is a government of Kerala backed company, which means the deposits are safe since the government of Kerala is backing these deposits.
A 1, 2 and 3 year deposit attracts an interest rate of 8.25 per cent. Senior citizens are entitled to an extra 0.25 per cent interest rate. Deposits of upto Rs 2,000 crores are guaranteed by the government of Kerala.
Mahindra and Mahindra Finance
The Mahindra and Mahindra Finance Fixed Deposit has a Crisil rating of 'FAAA'. Like HDFC, the company offers an interest rate of 7.75 per cent to 7.85 per cent, across tenures ranging from 12-months to 60 months.
However, this is only for online deposits and other deposits fetch an interest rate that is much lower ranging from 7.50 per cent to 7.55 per cent.
The yield can go as high as 8.48 per cent over the tenure of 48 months. The minimum amount of deposit that one can invest is Rs 5,000. Senior citizens are entitled to an extra 0.25 per cent interest rate, over and above that mentioned.
The PNB Housing deposit offers high safety assurance through a FAAA rating by CRISIL.These deposits offer a slightly lower interest rate, when compared to HDFC and Mahindra Finance. In fact, the interest rate on these deposits are placed at 7.25 per cent for both 12 and 24-months.
The deposits are relatively safe, as the company is promoted by Punjab National Bank, which is a government of India owned enterprise. However, if you see the interest rates are much lower when compared to peers and hence not the most lucrative option around.
LIC Housing is a FAAA rated fixed deposits scheme. This LIC promoted housing finance company offers an interest rate of 7.30 per cent on one-year deposits, 7.35% on 18 months deposit and beyond it, the company offers an interest rate of 7.50%.
This again is a relatively safe deposit that is not a bad bet at all. Senior citizens are entitled to an extra 0.25 per cent on these deposits. The interest rates are pretty much competitive when compared to other companies.
The Fixed Deposits of Bajaj Finserv are rated FAAA by Crisil, offering the highest possible safety for timely payment of interest and principal amount. The deposits from this company offer the best rates, when compared to other NBFCs mentioned above.
The deposit interest rates are 7.85 per cent for a new customer, 7.95 if you renew your existing deposit and 8.10 per cent if you are a senior citizen. In terms of NBFC deposits, this compares only to KTDFC in terms of interest, though the latter is marginally higher.
Gruh Finance is again rated FAAA by CRISIL. This company does not offer the best interest rates and the monthly income FD fetches an interest rate of 6.75 per cent for deposits from 12 to 60 months.
In Gruh Finance, HDFC holds approximately sixty per cent. Gruh Finance is a housing finance company which offers loans to individuals for purchasing or construction of new houses.
It also gives loans for the renovation of dwelling units. There is a segment in gruh finance called as the self-employed segment. In that segment, gruh finance gives loans even there are no formal income proofs. Gruh has a wide range of network with nearly 136 offices across India.
So, if you are looking to invest in AAA rated FDs with high interest rates, Gruh Finance FD is yet another option for you.
Look at small finance banks
Apart from the company AAA deposits, one can also look at small finance banks. For example, Uttkarsh Small Finance Bank offers an interest rate of 8.5 per cent on 456-days to less than 2-years deposit.
Senior citizens can avail an interest rate of 9 per cent on the same tenure. If you are looking at a slightly lower tenure of 1-year to 455-days, the bank offers you an interest rate of 8.40 per cent and the interest rate is 8.90 per cent for senior citizens.
Small Finance Banks have recently been given license by the Reserve Bank of India. We really cannot comment on the safety of these deposits as small finance banks are relatively new.
What are AAA rated deposits?
Before knowing about AAA rated deposits, we need to know about what is a fixed deposit. An investment where money is placed in a bank for a fixed period to earn interest. The main advantage of the FD is the risk is low of losing your investment.
CRISIL is a global analytical company which provides ratings and research, risk policy advisory services, etc. It plays a significant role in assisting banks and borrowers like fills the gap between banks and borrowers. The other rating agencies are ICRA and CARE.
CRISIL ratings are benchmark for trade market, and the following ratings are for a fixed deposits
CRISIL-D: this rating is by default.
CRISIL- C: this rating is high risk.
CRISIL- B: this rating is little safety.
CRIS-A: this rating is adequate security.
CRISIL-AA: this rating is high safety.
CRISIL-AAA: this rating is the highest safety.
Disclaimer: Company deposits can be risky and in the past there have been cases of default. This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article.