Owned by the Tamil Nadu government, Tamil Nadu Power Finance and Infrastructure Development Corporation (Tamil Nadu Power Finance) is offering interest rates of 8% on its Fixed deposits for individuals and 8.5% for senior citizens. This is much better than government-owned banks.
Interest rates on FDs offered by Tamil Nadu Power Finance
Individual senior citizen
12 months 7.00% 7.25%
24-Month 7.25% 7.50%
36-Month 7.75% 8.25%
48-Month 7.75% 8.25%
60-Month 8.00% 8.50%
Better interest rates than banks
While State Bank of India FD offers the best 5.5% interest rate, the interest rates offered by Tamil Nadu Power Finance and Infrastructure Development Corporation are not bad at all. In fact, the 8.50% interest rate for senior citizens is unmatched at the moment.
We also found that the company’s website is very conducive to opening online deposits. In fact, we doubt that there will be any brokers handling the deposits and you have to do it online. You can open Fds online and we liked the website interface very much. Investors who are looking for a fairly reasonable interest rate can invest in FDs of Tamil Nadu Power Finance.
When investing in Fixed deposits we suggest, do not go for a longer-term than 3-years. We believe, and we may be wrong, that interest rates may rise slightly in the medium to long term. So suppose you have invested for a period of 5 years and if you want to increase the interest rate, you have to break the Fixed deposit and if you want to make the same investment again, you have to pay a penalty. So, a 2-3 year deposit would be good, in fact you can even look at a 1 year deposit.
We believe that there should be no threat as this is the government of Tamil Nadu Enterprise. In fact, we had earlier invested in the Kerala Transport Development Finance Corporation (KTDFC) Fixed deposits of the Kerala government and we did not face any problem while releasing. However, we do not recommend KTDFC deposits, as interest rates have fallen sharply otherwise KTDFC deposits were also safe.
Readers often ask us to wait for interest rates to rise and then invest. We believe that interest rates on Fixed deposits are the lowest and it is a little far to assume that they will come down from here. It is possible that when the financial recovery gathers, the demand for loans will increase and banks will be forced to raise their deposit rates. This is one reason we are telling investors not to keep money for long periods of time.
To conclude, we believe that the deposits of Tamil Nadu Power Finance and Infrastructure Development Corporation are excellent in Fixeds of interest rates and security. In fact, 8.5% interest rate is also offered for senior citizens.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Top Markets News journalist was involved in the writing and production of this article.