Do these 5 corporates offer better FD interest rates to depositors?

You must understand the credit ratings and risks before you invest.

Company FDs offer higher interest than banks

The Reserve Bank of India (RBI) announced a 50 bps increase in the repo rate in September. It was the fourth consecutive time this year that the repo rate was increased. The total increase has been 190 bps since May 2022. As a result, leading NBFCs and HFCs offer increased FD interest rates. Corporate FD interest rates are higher than public and private sector banks. 

Also Read: Fixed Deposit FAQs

Due Diligence

DICGC will not cover corporate FD with Rs. 5 lac deposit insurance, unlike bank FDs. Investors should study CARE, ICRA, and CRISIL ratings when they select corporate fixed deposits (FDs). The rating is assigned based on the financial health of the HFC or NBFC. Corporate FDs rated highly have lower default chances in principal payments and interest. 

Corporate FDs with Best Interest Rates

The following corporates offer the best interest rates on FDs: 

Shriram Transport Finance Co Ltd

It offers a 7.76% interest rate per annum. It is monthly compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,513 after three years. It will also offer a 0.25% additional interest per annum on maturity renewals. India Ratings and Research (Ind-Ra) has assigned this NBFC an AA+/Stable rating. It means the NBFC has minimal credit risk and high safety regarding the timely financial obligations servicing. 

Shriram City Union Finance Co Ltd

It offers a 7.76% interest rate per annum. It is monthly compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,513 after three years. It will also offer a 0.25% additional interest per annum on maturity renewals. ICRA has assigned this NBFC a MAA+/Stable rating. It means the NBFC has very low-risk and high-quality credits. 

Also Read: Save income tax by investing in FDs.

PNB Housing Finance Ltd. 

It offers a 7.55% interest rate per annum. It is annually compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,440 after three years. CRISIL has assigned this HFC a FAA+/Negative rating. It means there is a strong indication of timely principal and interest repayment by this HFC. 

Bajaj Finance Ltd. 

It offers a 7.40% interest rate per annum. It is annually compounded on 3-year cumulative FDs. You will have to deposit a minimum of Rs. 15,000, which will grow to Rs. 18,582 upon maturity. CRISIL has assigned this NBFC a AAA/Stable rating. 

LIC Housing Finance Ltd

It offers a 6.95% interest rate per annum. It is annually compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,233 after three years. CRISIL has assigned this HFC a AAA/Stable rating. It means there is a strong indication of timely principal and interest repayment by this HFC. 

Also Read: 5 Banks with the best FD interest rates.

Conclusion

The data mentioned above has been provided by the respective websites of these HFCs and NBFCs. The interest rates of FDs are for non-senior citizens. It means it is for persons under 60 years old. We have considered the first slab of deposit for each HFC and NBFC.   

The Reserve Bank of India (RBI) announced a 50 bps increase in the repo rate in September. It was the fourth consecutive time this year that the repo rate was increased. The total increase has been 190 bps since May 2022. As a result, leading NBFCs and HFCs offer increased FD interest rates. Corporate FD interest rates are higher than public and private sector banks. 

Also Read: Fixed Deposit FAQs

Due Diligence

DICGC will not cover corporate FD with Rs. 5 lac deposit insurance, unlike bank FDs. Investors should study CARE, ICRA, and CRISIL ratings when they select corporate fixed deposits (FDs). The rating is assigned based on the financial health of the HFC or NBFC. Corporate FDs rated highly have lower default chances in principal payments and interest. 

Corporate FDs with Best Interest Rates

The following corporates offer the best interest rates on FDs: 

Shriram Transport Finance Co Ltd

It offers a 7.76% interest rate per annum. It is monthly compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,513 after three years. It will also offer a 0.25% additional interest per annum on maturity renewals. India Ratings and Research (Ind-Ra) has assigned this NBFC an AA+/Stable rating. It means the NBFC has minimal credit risk and high safety regarding the timely financial obligations servicing. 

Shriram City Union Finance Co Ltd

It offers a 7.76% interest rate per annum. It is monthly compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,513 after three years. It will also offer a 0.25% additional interest per annum on maturity renewals. ICRA has assigned this NBFC a MAA+/Stable rating. It means the NBFC has very low-risk and high-quality credits. 

Also Read: Save income tax by investing in FDs.

PNB Housing Finance Ltd. 

It offers a 7.55% interest rate per annum. It is annually compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,440 after three years. CRISIL has assigned this HFC a FAA+/Negative rating. It means there is a strong indication of timely principal and interest repayment by this HFC. 

Bajaj Finance Ltd. 

It offers a 7.40% interest rate per annum. It is annually compounded on 3-year cumulative FDs. You will have to deposit a minimum of Rs. 15,000, which will grow to Rs. 18,582 upon maturity. CRISIL has assigned this NBFC a AAA/Stable rating. 

LIC Housing Finance Ltd

It offers a 6.95% interest rate per annum. It is annually compounded on 3-year cumulative FDs. A cumulative FD amounting to Rs. 10,000 will grow to Rs. 12,233 after three years. CRISIL has assigned this HFC a AAA/Stable rating. It means there is a strong indication of timely principal and interest repayment by this HFC. 

Also Read: 5 Banks with the best FD interest rates.

Conclusion

The data mentioned above has been provided by the respective websites of these HFCs and NBFCs. The interest rates of FDs are for non-senior citizens. It means it is for persons under 60 years old. We have considered the first slab of deposit for each HFC and NBFC.   

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