The banks have started lowering their interest rates on fixed deposits. This hurts people who invest in them. However you can look into fixed deposits offered by companies.
Below are the details of 5 companies which have highest credit rating (AAA) and offering interest rate of more than 9% on their fixed deposit schemes.
In comparison SBI is offering 7.5% to 7.75% for 1 to 10 years fixed deposits while ICICI Bank is offering 7.75% to 8.00% on their FDs.
- 1 1. DHFL Aashray Deposit Plus
- 2 2. Bajaj Finance Ltd Fixed Deposit
- 3 3. KTDFC Ltd. Fixed Deposit
- 4 4. Mahindra and Mahindra Financial Services Ltd FD
- 5 5. Shriram Transport Finance UNNATI FD Scheme
- 6 TDS on Company FDs:
- 7 Tax on Company FDs:
- 8 Key Points before Investing:
- 9 To Conclude:
1. DHFL Aashray Deposit Plus
DHFL is one of India’s leading housing finance companies.
Credit Rating: “AAA” by CARE and “FAAA” by BWR
Also Read: What does Credit Rating Mean?
- 0.25% Additional interest rates for Senior Citizens, Widows, Armed Forces personnel, DHFL Home Loan/SME Loan/Mortgage borrowers
- Minimum Deposit Amount: Rs 2,000 and multiples of Rs 1,000 thereafter
- Loan up to 75% of the FD Principal and accrued interest is available
DHFL Swayamsidha Deposit for Women:
This FD is especially for women offering higher interest rates:
2. Bajaj Finance Ltd Fixed Deposit
Bajaj Finance Ltd is a NBFC (non-banking finance company) dealing in all kinds of loans like Personal, Two/Three wheeler loans, car loans etc.
Credit Rating: “FAAA” By CRISIL and “MAAA” By ICRA
- Additional 0.25% interest for Senior citizens
- Additional 0.10% interest for Bajaj group employees and existing customers for deposits up to Rs.1 Crore
- Can access FDs online through their customer portal
3. KTDFC Ltd. Fixed Deposit
KTDFC (Kerala Transport Development Finance Corporation Ltd) is NBFC wholly owned by Government of Kerala and deals in Personal and Vehicle Loans among other things.
Credit Rating: KTDFC Fixed Deposits are fully guaranteed by Government of Kerala
4. Mahindra and Mahindra Financial Services Ltd FD
Mahindra and Mahindra Financial Services is leading NBFC with focus on rural areas and is top tractor financier in India.
Credit Rating: ‘FAAA’ by CRISIL
- 0.25% additional rate for senior citizens.
- 0.35% additional interest for all Mahindra group company employees and Employees Relatives
5. Shriram Transport Finance UNNATI FD Scheme
Shriram Transport Finance is NBFC mainly dealing in Commercial Vehicle Finance.
Credit Rating: ‘FAAA’ by CRISIL and “MAA+” by ICRA
Fixed deposits are accepted in multiples of Rs.1000/- subject to a minimum amount of Rs.10000/- per deposit account.
TDS on Company FDs:
Companies would deduct TDS at the rate of 10% of interest, if the interest earned is more than Rs 5,000 in a financial year.
Tax on Company FDs:
The interest received on Company Fixed Deposit is fully taxable. The interest would be added to your annual income and taxed at marginal tax rates.
Key Points before Investing:
Premature Withdrawal is possible on the above company fixed deposits but it requires much more paper work and follow ups. Even the penalty may be more severe as compared to banks
Opening Fixed Deposit is more tiresome as you need to fill forms, visit company branch or get hold of their agents.Also have to give fresh documents for KYC. Bank FDs can be opened online, which is much more convenient.
The above companies are offering have the highest credit rating (which means very low chances of default) and are offering interest rates 1% to 2% higher than the bigger banks. You must look into them for your fixed income portfolio especially if they have easy approachable branches or agents near you.
have you invested in these companies FDs before? How was your experience? Please share in comments section…