Interest rates on bank fixed deposits (FDs) have fallen to such abysmally low levels, that it is better to look at other options. For example, State Bank of India gives currently gives a low rate of just 6 per cent on fixed deposits. This is awful, to say the least and is nowhere near 9 per cent that was being offered until a few years ago. In any case here are a few best deposits that give higher interest rates than banks FDs and are also very safe.
KTDFC Fixed Deposits
These deposits are guaranteed by the government of Kerala and are hence very safe. The interest rates on these deposits are 8.50 per cent for 1, 2 and 3 years. For 4 and 5 years the interest rate drops marginally to 8.25 per cent. Because of compounding the yield on a three year deposits is as high as 9.64 per cent.
If you are a senior citizen you get an interest rate of 8.75 per cent on 1, 2 and 3 year deposits, with the yield going as high as 10 per cent on the three year deposits. These deposits are currently the best and the safest in a falling interest rate regime.
These are AAA rated deposits and hence very safe. The interest that one gets on this is 8.05 per cent for 24-35 months. This again is a good 2 per cent over and above what banks like State Bank of India are offering.
This is not bad at all considering the deposits are also very safe. Senior citizens are entitled to an extra 0.25per cent. The monthly income scheme can offer retired individuals an interest rate of 7.77 per cent. Go for these scheme, in place of bank deposits as they offer a higher interest rate. Go for the medium term tenure.
Monthly Income Scheme of post office
This is a post office scheme that is guaranteed by the government of India. The interest rate on these deposits is 7.6 per cent per annum, that is payable monthly. Again, this is much better than what most banks offer in the country and the deposits are safe.
There is a charge of 2 per cent, if you withdraw the deposits early before three years and one per cent thereafter. However, it is important to note that there is a cap of Rs 4.5 lakhs maximum that an individual can invest in these deposits. So, you need to keep that in mind before you invest in the same.
Dewan Housing Finance
The fixed deposits of Dewan Housing can fetch you an interest rate of 8 per cent on a 48-120 months deposit. If you are a privileged customer the rates can go as high as 8.25 per cent per annum.
These would be Senior Citizens (Age 60 years and above), Armed forces personnel, Widows, DHFL home Loan/SME Loan/Mortgage Loan borrowers (appropriate proof should be attached). There are monthly income schemes, cumulative schemes and quarterly, half yearly and yearly payment schemes.
If you are able to deposit more than Rs 50 lakhs, you are entitled to an extra 0.25 per cent interest rate. These deposits have been rated CARE AAA by CARE and BWR FAAA by Brickwork. This is thus a safe and one of the best FDs to invest in.
Public Provident Fund (PPF)
If you are looking at a cumulative option that would help you gather money for your retirement, the PPF would be a good option. You get tax benefit under Sec 80C and the best part is that the interest income is also exempt from tax. The PPF gives you an interest rate of 7.9 per cent, which is not bad at all under the present context. The minimum amount that you can invest in the scheme is Rs 500 and the maximum amount that you can place is Rs 1.5 lakhs. Go for this scheme if you are also looking to save on taxes.
Shriram Transport Finance FDs
For non cumulative deposits for a period of 48 months, you get an interest rate of 7.95 per cent and that is the best interest for cumulative deposits from the company.
If you are opting for the yearly payout the interest rate is as high as 8.25 per cent on a 6-month deposit.
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