The Tamil Nadu State Government owned TN Power Finance Corporation is offering interest rates as high as 8.25 per cent on its regular deposits. This is pretty decent and almost 2-3 per cent higher than what most big banks in the country are offering.
Interest rates on the TN Power Finance Corporation Fds
The interest rates offered by the company are high. The cumulative deposit of 12 months fetches an interest rate of 7.25 per cent, a 24- month cumulative deposit fetches an interest rate of 7.50 per cent, while the 36 month and 40 month deposit fetches 8 per cent and a 6-month deposit offers an interest rate of 8.25%. Senior citizens are entitled to an extra interest rate of 0.50 per cent.
Cumulative deposit FD interest rate from TN Power Finance
|36 months & 40 months||8.0%|
Are the deposits of TN Power Finance Corporation safe?
TN Power Finance Corporation is a government of Tamil Nadu owned enterprise. Thus far, we have not had a single case where there has been a default from a state government owned company on deposits.
The company has been accepting deposits for many years now, and we do not see major risk here. The interest rates too remain attractive. Apart from the safety aspect, we found the mechanism to apply online for the Fds very investor friendly. One can create a fixed deposit online, which is a big advantage.
The KYC details like address proof and identity proof have to be uploaded online, so as to comply with the present regulations. There is also a contact number where one can call the company for greater clarity on its deposits. One can also check the payment status and interest status online.
Details of the TN Power Finance Fds
Investors can apply for the fixed deposits with a tenure ranging from 1 to 5 years. There is an option to apply for a cumulative or a non cumulative deposit. The minimum amount that you need to apply is for a sum of Rs 25,000 and in multiples of Rs 1,000 thereafter.
Not only individuals, but, trusts, HUFs and NRIs can also apply for the fixed deposits of TN Power Finance Corporation. Apart from opening the deposit online, one can also submit the forms manually. There could be some agents that facilitate the process.
Tax implications on the TN Power Finance Fds
The fixed deposits of TN Power Finance Corporation would attract a TDS, if the investment amount crosses the Rs 5,000 mark. In case, your income is below the threshold prescribed by the government you can submit form 15g and form 15h as the case maybe.
One can also make a loan request against the deposit, whereby the interest is slightly more than the FD interest. However, it is not advisable to take a loan against Fds. If you have some surplus cash, this fixed deposit is not a bad choice, given the present condition of interest rates in the country. However, it is advisable to go for the short term tenure.