After the recent move of Reserve Bank of India (RBI) to increase the repo rate by 40 basis points, Fixed Deposits are going to be more attractive. Many leading public and private banks have already introduced an interest rate hike on Fixed Deposits that will allow investors to receive higher interest rates on their investment.
Fixed Deposits have emerged as one of the safest investment options and many people opt for FDs amid uncertainties like high inflation and volatility in share market. Individuals can avail the low risk financial instrument from banks, non-banking financial institutions, and post offices.
One such government-owned institution that has stood out and offered a highly attractive interest rate on FDs is Tamil Nadu Power Finance and Infrastructure Development Corporation Limited. It has decided to offer an interest rate of 8.50 to senior citizens.
The company is offering two products presently namely that has been tailor made to suit the requirement of investors. The two products are non-cumulative fixed deposit and cumulative fixed deposit.
Non-cumulative fixed deposit: Under these fixed deposits, investors can get interest on monthly, quarterly, and annually. When the FDs are matured, they would be eligible to get their investment back. These FDs are available with the period of 2, 3, 4, and 5 years. The current interest rates remain available for regular citizens and it varies between 7.25% to 8% depending on the tenure that investors decide to choose. Meanwhile, if the investor is a senior citizen the interest rate will be 8.50%.
Senior citizens above 58 years and above can avail an interest rate of 8.50%. If citizens above 58 years deposit a sum of Rs 50,000 for a period of 60 months, that rate of interest will be 8.50%. They will get 71,250 after 60 months when the FD gets matured. They will get 7.50% interest rate on FDs for 24 months, 8.25% rates on FDs maturing in 36 months, 8.25% rate on FDs maturing in 48 months, and 8.50 interest rates on FDs maturing in 60 months.
Cumulative fixed deposit: This is the second product that Tamil Nadu Power Finance and Infrastructure Development Corporation Limited offering to senior citizens. In this product, the interest rate will be quarterly compounded and paid to investors on maturity. The period of these fixed deposits is also 1, 2, 3, 4, and 5 years. Citizens will get an interest rates on their FDs between 7.25% to 8.50% according to the tenure that they decide to select. Senior citizens can get an additional rate of interest of 0.5%. Citizens above 58 years and above will be eligible to receive 8.50% on FDs with a tenure of 60 months.
If they invest Rs 50,000 for a tenure of 60 months, they will get Rs 76,139 after the FDs is matured. Meanwhile, senior citizens will get 7.25% interest rates on FDs maturing in 12 months, 7.50% interest on FDs maturing in 24 months, 8.25% interest on FDs maturing in 36 months, 8.25% interest on FDs maturing in 48 months, and 8.50% rate on FDs maturing in 60 months.
The investment in these FDs are quite safe as it is a Tamil Nadu Government-owned enterprise.
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Story first published: Sunday, May 15, 2022, 2:00 [IST]