Fixed Deposit interest rates in India are falling. In a few weeks State Bank of India, Oriental Bank of Commerce, Punjab National Bank, Bank of India and Bank of Baroda have all slashed interest rates on fixed deposits.

If you are a retired individual it could hurt you badly, if you depend on interest income earned from fixed deposits for sustenance. Here are a few fixed deposits that you could still consider before interest rates fall any further.

KTDFC Deposits

The Interest rate on a KTDFC deposit can go as high as 10.50 per cent, if the deposit is above Rs 25 lakh and you are a senior citizen. If the deposit is under Rs 25 lakh, the interest rate offered is 10 per cent for a three year deposit. At the moment there are very few banks or NBFC's that give these kind of returns. Interestingly, the deposits are backed by the government of Kerala making them extremely secure. A super bet for the medium to long term, especially if interest rates fall in the economy.

IFCI NCDs

The currently open IFCI NCDs is also a great bet. The Government owned financial institution IFCI is offering NCDs at interest rates between 9.8 and 10 per cent making it an attractive proposition, for those looking at returns from fixed instruments.

The issue of NCDs was open from Oct 20 and would close on November 21, 2014. The NCDs bonds are rated A and AA- by domestic rating companies ICRA and Brickwork.

Interest rates

1) Cumulative Option

Under the cumulative option the NCDs offer an interest rate of 9.90 per cent for 5 years and 10 per cent for 7 and 10 years.

2) Monthly Option

Under the Monthly Option the interest rate is 9.5 per cent for 5 years.

3) Annual option

Under the cumulative option the NCDs offer an interest rate of 9.90 per cent for 5 years and 10 per cent for 7 and 10 years

Conclusion

In case of debt instruments, one does look for high interest rates, security and liquidity. In the case of the IFCI NCDs and KTDFC they offer all three, making them an excellent investment opportunity to lock money, if one is looking for cumulative of a regular interest plan. Especially good for retired folk, since they are government owned entities and the chances of a fault are almost zero, something that retired folk look forward to.

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