Interest rates have completely collapsed over the last couple of quarters. Large government and private Banks are offering an interest rate of a maximum of 5.5 per cent per annum. Here are a few company fixed deposits that are AAA rated and still offer an interest rate of up to 8.40 per cent. It's important to remember that company Fds are not secure deposits and hence there is a "BIG" element of risk. We are just placingfacts before our readers and not endorsing any of the deposits.
Shriram Transport Finance Fds
This company's fixed deposits are rated AAA by CRISIL. A 5-year deposit offers an interest rate as high as 8.40 per cent, while the 4-year deposit offers an interest rate of 8.20 per cent and a 3-year deposit offers an interest rate of 8.15 per cent per annum.
This is probably the highest from any AAA rated NBFC deposit. In terms of safety it is for the investor to discern, given the fact that NBFCs and banks have come under severe financial strain, following a slowdown in the economy and ballooning non performing assets. Senior citizens are entitled to an extra 0.40 per cent by way of interest.
Bajaj Finance Fixed Deposits
Bajaj Finance has a FAAA By CRISIL and a MAAA By ICRA. The company offers an interest rate of 7.20 per cent on a 3, 4 and 5 year deposit. One can opt for the cumulative, monthly payout or a quarterly and annual payout.
Senior citizens would get an extra 0.25 per cent by way of interest. For a shorter duration of 1 year, Bajaj Finance offers an interest rate of 7 per cent. It is important to remember that company Fds, attract a TDS after the interest crosses the Rs 5,000 mark. So, in case you are not liable to pay taxes, it's best to submit the form 15g or form 15h as the case maybe.
PNB housing is also rated AAA by Crisil. The housing finance company offers an interest rate of 7 per cent on a 5-year deposit, while the interest payable on 2 and 3 year deposit is 6.90 per cent. Senior citizens are entitled to an extra 0.50 per cent on their deposits.
If you are looking for a shorter term duration of just 1 year than PNB Housing Finance offers an interest rate of 6.65 per cent per annum. One can opt for the cumulative as well as the non cumulative scheme.
Mahindra and Mahindra Financial Services
Only recently Mahindra and Mahindra Financial Services dropped their interest rates pretty sharply. The company offers an interest rate of just 5.70 per cent on its 1-year deposit, while the 4 and 5 year deposit offers an interest rate of 6.40 per cent. The interest rates are not too great, but the deposits are AAA rated.
With interest rates having fallen dramatically in the last 1 year, we advise investors not to go for long term deposits like 5-years, as there could be a possibility of interest rates heading higher in the next 1 year.