It's always a tricky proposition to invest, when interest rates have fallen and stock prices have crashed. If you have some surplus liquidity and are willing to invest for a period of 1-3 years, you can look at many options. Here are 4 places where you can invest sums of up to Rs 5 lakhs.
Bajaj Finance Fds
Given that interest rates on bank deposits are near the 5.6 per cent to 6 per cent range, an interest rate of 7 per cent on a 24-month deposit of Bajaj Finance is not a bad bet at all. A 24- to 35 month deposit at the institution fetches an interest rate of 7 per cent, while beyond this, one gets an interest rate of 7.10 per cent.
The deposits are AAA rated and hence the payment of principal an interest amount is safe. At time when companies are struggling due to lockdown, it would be wise to invest in companies with a strong pedigree and good ratings.
IDFC First Bank Savings Account
The balances on the savings account of the bank, which are in excess of Rs 1 lakh, gives you an interest of 7 per cent. Interest income upto Rs 10,000 earned from a savings bank account is also tax free up to a sum 10,000.
If the balance in the savings account is less than Rs 1 lakh, you still get a decent interest rate of 6 per cent. This interest rate is even better than the FD interest rates of most government banks in the country.
Apart from this one also gets a personal accident insurance cover upto Rs 25 lakhs, a free debit card valid for life and Rs 250 cash back every month on movies, plays or events on BookMyShow.
Fds of Mahindra Finance
If you have spare money upto Rs 5 lakhs, you can also consider the deposits of Mahindra Finance. The interest rates are slightly higher than Bajaj finance an attract an interest rate of 7.05 per cent for 27 months, 7.20 per cent for 33 months and 7.30 per cent for 40-months.
As far as company fixed deposits are concerned it is important to remember that they attract a TDS if the interest income crosses the Rs 5,000 mark.
Investors should therefore plan accordingly. The deposits are AAA rated and are hence very safe. Investors with a medium term perspective can look to lock money in the fixed deposits of Mahindra Finance.
Post Office Time Deposits
The Post Office Time Deposits offer an interest rate on a deposits that are much better than banks. If you look at the 5-year deposit, they offer an interest rate of 6.7 per cent. At the moment, government owned banks or the larger private sector banks, do not offer such high interest rates on FDS. This investment is also safe.
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.