FD Rates: Even as the inflation in the country is hovering over 7 per cent and the equity markets is being volatile, people are looking for investment avenues that can offer than guaranteed returns while beating inflation. Corporate fixed deposits (FD) with non-bank finance companies Shriram City Union Finance (SCUF) and Shriram Transport Finance Corporation (STFC) can be looked at. They are offering interest rates in the range of 6.5-7.9 per cent on their fixed deposits, which is higher than bank FDs.
What Are Corporate Fixed Deposits?
A corporate FD is a type of fixed deposit issued by non-bank companies including housing finance firms or other non-banking financial companies (NBFCs). These are the instruments through which companies raise funds from the public. These deposits are also rated for their credibility by rating agencies.
FD Rates Offered By SCUF And STFC (Deposits Below Rs 5 Crore):
12 Months: For General Public – 6.50 per cent; For Senior Citizens – 7.00 per cent
15 Months: For General Public – 6.75 per cent; For Senior Citizens – 7.25 per cent
24 Months: For General Public – 6.75 per cent; For Senior Citizens – 7.25 per cent
30 Months: For General Public – 7.75 per cent; For Senior Citizens – 8.25 per cent
36 Months: For General Public – 7.75 per cent; For Senior Citizens – 8.25 per cent
45 Months: For General Public – 7.80 per cent; For Senior Citizens – 8.30 per cent
48 Months: For General Public – 7.80 per cent; For Senior Citizens – 8.30 per cent
60 Months: For General Public – 7.90 per cent; For Senior Citizens – 8.40 per cent.
What Are The Bank FD Rates?
The interest rates offered by SCUF and SRFC also beat the current level of inflation if invested for at least 15 months. Apart from that, they also stand higher than the interest rates offered by various banks on fixed deposits.
For instance, Punjab National Bank (PNB) offers interest rates in the range of 3.00-5.25 per cent, depending upon the duration of deposits. Senior citizens are offered 50 basis points more than that. IDFC First Bank offers FD interest rates in the range of 3.50-6.00 per cent. India’s largest private sector lender HDFC Bank offers 2.50-6.00 per cent interest rates. These interest rates are for deposits below Rs 2 crore. ICICI Bank also offers interest rates in the range of 2.50-5.75 on its fixed deposits.
To control inflation, the Reserve Bank of India (RBI) in early June raised the key repo rate by 50 basis points (bps), which was the second hike within almost as month after the central bank’s Monetary Policy Committee increased 40 basis points in off-cycle policy review in May. The retail inflation in May stood at 7.04 per cent, which is higher than the RBI’s target limit of 2-6 per cent.
Recently, several lenders, including ICICI Bank, State Bank of India and HDFC Bank, increased their interest rates for both deposits as well as loans.
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