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Mahindra Finance Slashes Interest Rate On FD Sharply; 1-Year FD To Fetch 5.7%
Non-banking financial company (NBFC) major Mahindra Finance has slashed interest rate on its fixed deposit scheme by a sharp 100 basis points, making it the highest cut off late. 1 basis point is one-hundredth of a percentage point. After the recent cut which came into effect from August 24, 2020, financial planners are of the suggestion that FDs of the company have tuned unattractive and instead there are other investment avenues that may yield higher returns.
Latest Interest Rate on Mahindra Finance FDs:
Minimum FD amount is Rs. 5000
| Tenure | Interest per annum (%) |
|---|---|
| 1 year | 5.7% |
| 2 years | 6.2% |
| 3 years | 6.3% |
| 4 years | 6.45% |
| 5 years | 6.45% |
In comparison for a five-year tenure, Post office schemes offer a better return of 6.7%, while for a 1-3 year tenure return earned shall be 5.5%.
"The sharp cut in deposit rates has made many corporate fixed deposits unattractive. Investors need to review their portfolios," Mohit Mittal, Product Head (Investments), Bajaj Capital is quoted as saying in a leading business daily.
Further he recommends the GOI bonds as an alternative to FDs which pay an interest rate of 7.1% currently, with interest being reset every 6-months.
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