With Feb inflation falling sharply, it is almost certain that the Reserve Bank of India (RBI) will cut interest rates in its policy meeting of April 2016. When that happens, you could bet that there maybe a further interest rate cut by banks and NBFC's in the country on their fixed deposits.
Here are fixed deposits to invest before RBI can act on interest rates.
Bajaj Finance Fixed Deposits (cumulative interest rates)
|12-17 months||18-23 months||24-60 months|
Take a look at the above interest rates. These are much better than banks. It can get better by 0.25 per cent, if you are a senior citizen. With compounding, the yields would easily be above 9 per cent. The good things about these deposits are that they are highly rated.
All of the rating agencies have accorded a rating of AAA for these deposits. What these means is that there is high safety when it comes to repayment of principal and interest amount. Being from the Bajaj group stable, it is doubtful that there would be a risk of default. In any case, company fixed deposits are by nature unsecure deposits. The one good thing is that Bajaj Finance has a portal where you can access your fixed deposits online. It's also important to note that any amount in excess of Rs 5000 would attract a Tax Deducted At Source or TDS.
Shriram Transport Finance Fixed Deposits (cumulative interest rates)
|12 months||24 months||36 months|
The Shriram Transport Finance Fixed Deposits come with a slightly elevated interest rate of 8.65 per cent for 36-months. As can be seen the interest rates are even better than most bank deposits in the country. There is also a non cumulative option where interest is paid on a monthly, quarterly or annual basis. The minimum amount that one requires to open a fixed deposit is Rs 10,000.
You can thereafter open the same in multiples of Rs 1000 each. It is important to note that you would need you would need KYC documents for applying for a company fixed deposits. That is address proof and identity proof. Apart from this you would also need a photograph.
Why you should invest in fixed deposits now?
We believe that interest rates in the economy would fall. Once that happens you would begin getting lower interest rates. What this means is that you would stand to lose out on lower interest rates.
It is also a good idea to go in for a slightly longer term tenure to prevent from further cuts in case interest rates fall. Still not a bad idea, if you are getting yields closer to 9 per cent, considering that retail inflation is slightly under 5 per cent. So, your real rate of returns is almost 4 per cent.