T N Power Finance

This is a government of Tamil Nadu owned enterprise. The company is offering an interest rate of 8.5 per cent for 36, 48 and 60 months tenure under the cumulative scheme of its FDs. The effective yield on these work to as high as 10.55 per cent for a 5 year deposit.

Senior citizens on the other hand get interest rates of 9 per cent on the 36, 48 and 60 months deposit. The cumulative yield on the 60 months deposit works to 11.31 per cent.

TN Power Finance also offers options of monthly, quarterly and annual interest payouts. These payouts would be useful for those looking at regular payouts.

KTDFC

KTDFC is a government of Kerala owned enterprise and the deposits of payment up to Rs 2,000 crores are guaranteed by the government of Kerala. The interest rates are marginally lower than TN Power, but, you can get an interest rate of 8.25 per cent for 1, 2 and 3 year deposits. For 4 and 5 year deposits the interest rates stand reduced to 8 per cent.

Interestingly, the compounding is done every month, so your yields move higher. Banks do not compound every month and compound interest every quarter.

You may have to courier your application after downloading the same from the company website as it does not have brokers currently.

NSC

The National Saving Certificates (NSC) is backed by the government of India and currently offers an interest rate of 7.6 per cent. This is better than banks that at best offer an interest rate of 6.5 per cent to 7 per cent. A sum of Rs 100 grows to Rs 144.3 after 5 years.

However, the deposits are not tax free and tax is applicable on the same. Interestingly, the certificates can be transferred from one person to another.

The minimum amount that one can invest is Rs 100 and there is no maximum limit that is applicable on these deposits. The NSC is safe as the same is backed by the government of India.

Voluntary Provident Fund

VPF is an excellent option for those looking at building a solid corpus with a decent interest rate. At the moment you get an interest rate of 8.65 per cent. Interestingly, you get 80C benefits from the same and the interest is completely exempted from tax. This can tremendously improve your post tax yields.

However, your investment would be as long as you continue your employees provident fund. This is an excellent option because of tax breaks, interest rates and also its safety. Go for this option if you are unlikely to retire anytime soon. 

Bond issued by the RBI

The bonds issued by the RBI currently offer you an interest rate of 7.75 per cent. This is way better than bank deposits and are even more safer than bank deposits.

However, they are also taxable like bank deposits. There is no sec 80c benefit on the same and the deposits are suitable for those looking at regular income.

Senior Citizens Saving Schemes

This is suitable for senior citizens who are retired and are looking at regular income. The interest rate offered is 8.3 per cent, which is a superlative rate under the present circumstances. The interest income is taxable though there is a sec 80C benefit that is available for investors.