Fixed Deposit better than PPF, NSC, SSY: Interest is getting up to 8.75% on this FD. Here we are going to tell whether you should invest in it? The 8.75% interest offered by STFC Fixed Deposit is higher than the current interest rates offered on small savings schemes like Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC) and Senior Citizens Savings Scheme (SCSS). is more.)
Shriram Transport Finance Company Limited, which is a part of Shriram Group. has announced an increase of 25 to 50 basis points (0.25% p.a. to 0.50% p.a.) in its corporate fixed deposit rates across various tenors. STFC said in a statement that customers can earn up to 8.25% interest on fixed deposits with effect from August 10, 2022. This 8.25% interest is applicable on FDs of 60 months.
STFC is offering 8% and 8.15% interest rates for FDs up to 3 years and 4 years respectively. The revised interest rate for one year FD is 6.75% and for two year fixed deposit it is 7.25%.
STFC offers an additional interest of 0.5% per annum to senior citizen depositors. That is, senior citizens can get 8.75% interest on a fixed deposit of 5 years. Where the deposit has a maturity period, an additional 0.25% interest will be paid per annum on renewal, the company said in a statement.
The 8.75% interest offered by STFC Fixed Deposit is higher than the current interest rates offered on small savings schemes like Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC) and Senior Citizens Savings Scheme (SCSS). is more.)
Let us tell you, STFC is a 42-year old company and is part of Shriram Group, which is one of the largest asset financing NBFCs in India. Fixed deposit schemes offered by NBFCs also called corporate FDs or company deposits are investment avenues offered by financial companies.
Should you invest?
Depositors should note that STFC is not a regular bank. Therefore, fixed deposits offered by NBFCs do not offer the same benefits as those offered by regular banks. There is a deposit insurance guarantee of Rs 5 lakh in case of banks. This means that even if the bank fails, the depositors will get back up to Rs 5 lakh. But that benefit is not applicable in case of fixed deposits offered by NBFCs.
“Unlike banks, deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs,” RBI said on its website.
STFC is a stable organization and its FDs are rated “Stable” by ICRA and India Ratings & Research, depositors should do proper research, or consult their financial planners before investing.
