Our economy is going through troubled and challenging times – low growth rate and the falling rupee has left very few investment options for us- the retail investors. In 2012,
Equity markets – were volatile and the future trend unclear
Real estate- Sluggish
Gold – Prices have barely moved much
Fixed Income – The interest rates are on a downtrend
Where does the conservative investor invest, in such a scenario?? Equity, Gold and real estate – are not preferred and haven’t performed anyway. Banks have been revising their interest rates on fixed deposits downwards regularly .Today, most of the nationalized and public sector banks offer somewhere between 7.5 % pa to 8.5 % pa for deposits ranging for a term of 1-3 years. The co-operative banks offer a higher rate – but not all of them boast of good fundamentals and considering the number of co-operative banks gone bust in the last 2-3 years, one can take only limited exposure.
Have you ever considered govt. Owned or state owned companies and NBFCs, or private companies with a high safety rating for investing your money?? Most of such companies have been around for ages, accept public deposits from the retail category and also give returns better than those offered by banks. Yet, not many people know about these. Here is a ready reckoner with the details-
Name of the company Rating Rate of interest (3 years term)
Mahindra & Mahindra Fin services CRISIL-FAAA 10.25 % pa
Tamil Nadu Power Finance State owned 10.00 % pa
Kerala Trans. Develop. Corp. State owned 10.25 % pa
PNB Housing Finance CRISIL –FAAA 9.40 % pa
HDFC Platinum Deposits CRISIL-FAAA 9.40 % pa
LIC Housing Finance CRISIL-FAAA 9.25 % pa
National Housing Bank CRISIL-FAAA 9.25 % pa
EXIM Bank CRISIL-FAAA 9.25 % pa
Most of these also offer higher rates for senior citizens (ages 60 years and above).
what is the tax implication for the same?
The tax implications are the same as bank fixed deposits. TDS would be deducted at 10 % plus surcharge, and the actual interest taxable at the income tax rates applicable to the investor.