3 Recurring Deposits To Open For 8.00 - 8.50% Returns

Depositors are likely to have to wait longer for things to return to normal, considering the prevailing low-interest rate scenario and the Reserve Bank of India's (RBI) recent decision to maintain the status quo and leave key interest rates steady. As a result of rising inflation and low-interest rates, real returns on fixed and recurring deposits are on the declining trend. As a result, investors are seeking better tax-efficient and inflation-beating returns outside of fixed-income instruments.

Such investors can look for recurring deposits, which may offer up to 8.50 percent in return. Recurring deposits are great for people who wish to invest on a regular or monthly basis rather than in a lump sum in order to get the highest rates of return. Recurring deposits have a maturity period ranging from six months to ten years, making them a good choice for both short and long-term financial goals. As a result, here are three recurring deposits to consider for your debt portfolio to earn up to 8.50 percent returns.

Shriram City Union Finance Recurring Deposits

Initially and foremost, let me remind you that Shriram City Union Finance has an ICRA rating of 'MAA+/ with Stable Outlook,' indicating strong credit quality. Although these ratings are unlikely to change, the security of your funds is not guaranteed.

Recurring deposits of Shriram City Union Finance come with a tenure of 12 to 60 months, and on deposits maturing in 12 months, the NBFC offers an interest rate of 7.03%. On recurring deposits maturing in 24 months, 36 months, 48 months, and 60 months, depositors will get interest rates of 7.12 percent, 8.18 percent, 8.34 percent, and 8.50 percent.

These interest rates are much higher if compared with that of interest rates provided by leading banks private and public sector banks on their recurring deposits. Corporate deposit interest rates are significantly higher than bank deposit interest rates, thus diversifying your investments is a smart way to welcome higher returns into your debt portfolio.

Always remember to examine the credit health of the respective company before investing in corporate fixed deposits; if it is rated 'Stable' or 'AAA' by rating agencies like as CRISIL, ICRA, and CARE, then you may consider going for short-term investment because no one can confirm how the company will perform in the long-term. Apart from the 'Stable' credit rating, we would like to recommend checking the company's financial background and repayment pattern in the case of Shriram City Union Finance.

Shriram Transport Finance Recurring Deposits

Shriram Transport Finance Company Ltd offers yet another fantastic recurring deposit. Before we get into the interest rates, it's worth noting that Shriram Transport Finance Company RD is rated 'FAAA/Stable' by CRISIL and 'MAA+/ with Stable Outlook' by ICRA, implying a better level of deposit safety and credit quality.

Effective from 1st August 2021, Shriram Transport Finance Company is offering an interest rate of 7.03% on deposits maturing in 12 months, and on recurring deposits maturing in 24 months, 36 months, 48 months, 60 months, the corporate is offering an interest rate of 7.12%, 8.18%, 8.34% and 8.50% same as Shriram City Union Finance.

Shriram Transport Finance Company and Shriram City Union Finance both provide the same interest rates, however, Shriram Transport Finance Company is ranked better. However, while investing in corporate deposits, keep in mind that, unlike bank fixed deposits, corporate deposits are not insured by the DICGC.

As a result, corporate deposit returns come with a higher default risk, which you should be aware of because higher credit ratings are not always credible.

North East Small Finance Bank Recurring Deposit

Among leading private sector and public sector banks, North East Small Finance Bank is offering the highest interest rates on recurring deposits. North East Small Finance Bank offers a recurring deposit scheme with an interest rate of up to 8% over maturities of 3 to less than 10 years.

North East SFB is paying 4.25 percent and 4.50 percent interest on deposits maturing in three and six months. The bank is giving a 5.50 percent interest rate on deposits maturing in 9 months to one year, and 7.50 percent and 7.00 percent on deposits maturing in 2 years and 3 to 4 years, respectively.

The general public will get an interest rate of 6.50% on deposits maturing in 5 years to 10 years. Senior citizens will get an additional rate of 0.50% on their deposits across all tenors. On recurring deposits maturing in 2 years, North East SFB is offering the highest rate of 7.50% to the general public and 8.00% to senior citizens and these rates are in force from 19th April 2021.

One key point to note about bank deposits is that they are guaranteed by the DICGC up to Rs 5 lakhs, therefore investing in the North East SFB's recurring deposit scheme is a safer choice than corporate fixed deposits.

North East SFB is giving an attractive rate of 8% over a two-year duration, a smart choice for short-term investments, while Shriram Transport Finance Company RD has been rated 'AAA' and gives up to 8.50 percent returns, a positive call for diversification. In this case, your risk profile will be the most important factor in deciding which one to choose.