If you are looking at interest rates in the range of 7 to 8 per cent, you can consider the below fixed deposits. Most of these are from non banking finance companies, which tend to give higher interest rates. However, we have selected a few banks as well, which always help, as bank fixed deposits or savings account are more liquid.
1. Shriram Transport Finance
The deposits from Shriram Transport have been rated as FAAA by Crisil, which shows the highest level of safety. The 3-year deposit offers an interest rate of 8.15 per cent, the 4-year deposit offers an interest rate of 8.20 per cent and a 5-year deposit offers an interest rate of 8.40 per cent.
The interest rates are decent, though we would advise investors to go for the short term duration.
The minimum amount of deposit that is offered is Rs 10,000. It's important to remember that there would be a TDS deducted if the interest income crosses the threshold limit of Rs 5,000. In the case of bank deposits the TDS would be if the amount crosses the Rs 10,000, while in the case of company deposits it is Rs 5,000.
2. IDFC First Savings Account
This is a pretty decent savings account, where the interest rate offered is 7%. The interest rates on savings bank account is exempt up to a sum of Rs 10,000. IDFC First Bank is relatively safe, as quarterly numbers have been pretty decent. Deposits of upto Rs 5 lakhs are in any case insured.
However, it would be foolhardy to predict safety and investors must consider their own risk appetite. At the moment, we feel that IDFC First Savings Account offers good interest rates and can be considered. The bank also offers some benefits like a lifetime free debit card.
The bank is a full fledged commercial bank and is not a small finance bank.
3. Bajaj Finance
This is another AAA rated deposit, where the deposits could be safe, as Bajaj Finance is promoted by the Bajaj Group. The deposits are rated AAA by both ICRA and Crisil and offer reasonably good interest rates.
A 2-year deposit fetches an interest rate of 7 per cent, whereas the 3, 4 and 5 year deposit gives an interest rate of 7.10 per cent.
Senior citizens are entitled to an extra interest rate of 0.25 per cent.
4. IndusInd Bank Fixed Deposits
The deposits of IndusInd Bank offer an interest rate of 7% over a 1-year period. We like these deposits as the tenure is short and it is good to invest for short term tenure. This is advisable because if interest rates move higher in the next few years, you would not have blocked money at such low interest rates.
The deposits can be opened online and offer instant liquidity as well. At the moment, Yes Bank and IDFC First Bank (savings account) both offer 7 per cent interest.
About the author:
Sunil Fernandes has spent 26 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, commodities, debt, mutual funds and tax planning. Sunil is currently Managing Editor for Goodreturns.in