3 Fixed Deposits That Offer Safety And Better Returns Than Bank Deposits

Interest rates on bank deposits have completely collapsed over the last few quarters. At best you are now getting an interest rate of around 5.75 to 6 per cent per annum as a maximum. Given the fall, it is time to look at some other options. We have chosen some high quality NBFC fixed deposits that offer higher returns and are also safe. All of these have been well rated by the major credit rating agencies in the country.

Bajaj Finance Fixed Deposit

The fixed deposits of Bajaj Finance offer an interest rate of 7.5 per cent on a 36 month to 47 months deposit. The interest rate on a 48 to 60 month deposit is 7.60 per cent per annum.

If you are a senior citizen, you are entitled to an extra interest rate of 0.25 per cent. So, senior citizens can get an interest rate of up to 7.85 per cent per annum on these deposits.

The Bajaj Finance deposits have been rated as AAA by Crisil. There is also an option of Systematic Deposit Plan, whereby you can invest a sum of Rs 5000 per month. This work just like the recurring deposits of a bank.

 

Mahindra Finance Fixed Deposits

The deposits from Mahindra Finance also offer safety along with decent interest rates, considering the present trend.

A 40-month deposit offers an interest rate of 7.80 per cent for those investors seeking to invest through the online mode. A 33-month deposit offers an interest rate of 7.7 per cent, with an effective yield per annum of 8.25 per cent for those looking to invest online.

Senior citizens are offered an additional interest rate of 0.25 per cent. There is also an option of periodic payments of interest, whereby an investor can opt for annual, quarterly interest payments etc. Like all NBFC fixed deposits, a TDS would be deducted, if the interest payment in a year exceeds Rs 5,000. The Mahindra Finance fixed deposit is good for safety and returns.

 

LIC Housing Finance

The interest rates offered by LIC Housing Finance are slightly lower than that offered by Bajaj Finance and Mahindra Finance.

A 3-year deposit offers an interest rate of 7.10 per cent per annum, under the cumulative and non cumulative scheme. A deposit of Rs 10,000 would fetch Rs 12285 after a period of three years.

Being also owned by LIC, the deposits are safe. One can also opt for the cumulative deposit option, where there is an option to receive interest payment every quarter or every month. Under the monthly income option the minimum amount of deposit required is Rs 2,00,000. On the other hand for the yearly option the minimum deposit required is Rs 20,000.

 

About the author

Sunil Fernandes has spent 25 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, mutual funds and tax planning.