If you are looking to invest in bank deposits, be prepared to get an interest rate of 4.5 to 5.5 per cent. However, if you are looking for even safer bets, with higher interest rates, go for the deposits from Kerala Transport Development Finance Corporation (KTDFC) and Tamil Nadu Power Finance Corporation.
KTDFC Deposits - Amount upto Rs 4,500 crores is backed by state government
Deposits upto a sum of Rs 4,500 crores is safe and is backed by the Government of Kerala. This makes the deposits from KTDFC extremely safe.
If you are looking to invest for a period of 1 year, the interest rate being currently offered is 8 per cent. For a 2 and 3 year tenure too the interest rate being offered is 8 per cent, which is probably the best that it can get from a government owned entity. Senior citizens are entitled to an interest rate of 8.25 per cent. Interestingly, under the cumulative scheme the interest rate is compounded every month, thus improving your returns even further.
Our experience with KTDFC has been good. The company can be contacted and you can get more information through a phone call. You can talk to the company directly to open a fixed deposit as well.
TN Power Finance Fixed Deposits
A 36-month and 48-month fixed deposit at TN Power Finance Corporation fetches an interest rate of 8 per cent, which is excellent. Again, this is a government owned enterprise of the State of Tamil Nadu, thus making it very safe.
One can also opt for a monthly payment of interest, where the interest rate is much lower than the 8 per cent on cumulative deposits. The monthly income scheme offers an interest rate of just 7.25 per cent, which is way better than banks.
Interestingly, the website is very user friendly and investors can download forms, check payment status, interest status and can apply for a fixed deposit online as well.
You can upload a jpeg of your picture and PAN card and complete your online application. This is interesting and comparable to any private sector company.
Given the low interest rates from banks, the interest rates offered by KTDFC and Tamil Nadu Power Finance Corporation is a good 2.5 per cent to 3 per cent more. They are also safe, which makes them a good investment proposition.
Investors can look to invest in these deposits for a period of 1-3 years. A longer term tenure or ore than three years is not advisable as during that time interest rates could go higher. All in all, the two fixed deposits are good investments for investors looking for good returns.
About the author
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