Home / Money / Personal Finance /  Looking beyond post office schemes, this fixed deposit gives up to 8.75% return
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Shriram Transport Finance Company, a Non-Banking Financial Company (NBFC) on Tuesday said that it has hiked interest rates on its fixed deposit scheme. As per the corporate, the new interest rates will be in force from 10th August and as a result of the modification fixed deposit rates across multiple tenors have been hiked by 25-50 basis points or 0.25-0.50 per cent per annum. Fixed deposits maturing in 1 to 5 years will be subject to new interest rates, On fixed deposits maturing in 60 months or 5 years, Shriram Transport Finance Company now offers a maximum interest rate of 8.25% to the general public and 8.75% to senior citizens and this interest rate is now the highest that customers can now get in the fixed deposit industry of banks. 

According to the press release statement of Shriram Transport Finance Company, senior residents will benefit from an additional 0.50 per cent interest rate on their deposits annually. The company has also stated that it will also provide an additional 0.25 per cent per annum interest on any renewals of a matured fixed deposit account. Those who are looking to invest in small savings schemes of the post office can think about the fixed deposit option of Shriram Transport Finance Company for not only inflation-beating returns but also can keep their deposits in a secure manner.

Shriram Transport Finance Company FD has been rated "[ICRA]AA+ (Stable)" by ICRA and rated "IND AA+/Stable" by India Ratings and Research, signalling a higher level of safety. If we look at the higher interest rates and decent credit ratings, it's kind of like adding extra cheese to a tortilla. Despite the fact that RBI increased the repo rate by 50 basis points to 5.40 per cent, some banks, including Canara Bank and IOB, have already begun raising their fixed deposit interest rates. Shriram Transport Finance Company, however, has higher FD rates than all private, public, and even small finance banks. 

Interest rates for well-known post office schemes including SCSS, Kisan Vikas Patra, PPF, Sukanya Samriddhi Account(SSA)​, National Savings Certificates (NSC), National Savings Monthly Income Account(MIS). National Savings Time Deposit Account(TD) are even much below the fixed deposit rates of Shriram Transport Finance Company. When it comes to the subject of what investors should do, they should keep in mind that corporate fixed deposits are not DICGC-insured. 

In terms of deposit security, bank fixed deposits are insured up to 5 lakhs by DICGC, and post office small savings schemes are backed by the government. In contrast, company fixed deposits only have credit ratings, which can change overnight if a company goes bankrupt, making both interest rates and deposits in these accounts unstable. However, company fixed deposits offer better returns than bank FDs; as a result, corporate fixed deposits have a high risk-to-reward ratio, meaning that higher returns in corporate deposits are accompanied by higher default risk.


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