Interest rates in the economy are falling and one more interest rate cut by the Reserve Bank of India (RBI) is expected next month.
A host of banks have cut interest on deposit rates, which are now nearing just about 8 per cent. Many individuals who depend on interest income for sustenance will now have to look outside of the traditional bank deposits in order to boost returns.
Also read how to save TDS on fixed deposits
Mahindra Finance Fixed Deposits are rated FAAA rating, which indicates a very high level of safety. This makes the deposits extremely secure considering the fact that company fixed deposits are not secure deposits.
Mahindra Finance is a part of the Mahindra Group and hence can be considered as very safe for investors to place money.
As can be seen from the table below the yields on the deposits work out to as high as 9.68 per cent, clearly beating bank interest rates.
The rates of Bajaj Finserv is slightly lower than KTDFC and Mahindra Finance. However, the company like Mahindra also has a very high rating. The deposits can be considered as relatively secure.
Kerala Transport Development Finance Corporation (KTDFC) is a government of Kerala owned enterprise. The fixed deposits come with an interest rate of up to 10 per cent. This is phenomenal considering that interest rates that are presently available on bank deposits.
|Period||Interest Rate (below Rs 25 lakhs)||Above Rs 25 Lakhs|
|3 Year||9.75%|| |
Rationale for investing
Interest rates in the economy are beginning to fall and bank deposit interest rates have dipped from levels of 9.5 per cent to the current levels of just about 8 per cent.
There is every reason to believe that interest rates are headed lower. It is therefore advised to lock-in money in some of the company deposits as they offer very good interest rates. If you place money in three year deposits you may not have to worry about falling interest rates. The deposits mentioned above are pretty secure and the chances of a default are also minimal.