Category: Personal Finance

A ‘Sell’ Rating Is Given To This Private Sector Lender

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Investment

oi-Roshni Agarwal

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Yes Bank

is showing continued stress in its book with new loan stress at 17% as per brokerage firm Elara Capital. Also outstanding stress stands at 39 percent.

On the operations front, while profitability saw a surge quarter on quarter by 16 percent, on a yearly basis there has been seen a decline of 101% in net profit in the review period ending December 2020.

A ‘Sell' Rating Is Given To This Private Sector Lender

A ‘Sell’ Rating Is Given To This Private Sector Lender

Also asset quality continued to show stress with sharp deterioration in the review period.

Stress from new loans that included standstill NPL, SMA1, SMA2 together with restructured loans were high at Rs. 282 billion or 17 percent of total loans in the December ended quarter as against just 5% in Q2 period of the ongoing fiscal year. Reported GNPLs of Yes Bank stood at 15% vs 17% QoQ. Total outstanding stress loans rose sharply to 39% from 29% QoQ with proforma GNPLs rising from 18% to 20% and standard stress loans rising from 11% to 19%.

Growth seen in deposit on a QoQ basis

There was seen growth in both deposits and CASA on a QoQ basis but there was decline on a yearly basis at 12% and 29%, respectively. Disbursal of loans to the MSME and retail segment topped Rs. 120 billion as against the targeted levels of Rs. 100 billion. Also, credit cost saw a surge on increasing stress in the bank’s assets portfolio.

Elara Capital Recommends Sell Rating On Yes Bank

On continuing stress in its loan book and as there continues to be a spike in its asset portfolio as was seen by the brokerage for the H2Fy21, the brokerage has given a Sell call on the counter with a target price of Rs. 6 per share. Last, the scrip closed at a price of Rs. 16.05 per share on the NSE. In the December ended quarter, mutual funds have also reduced their shareholding in the counter.

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What Makes Me To Opt Senior Citizen Savings Scheme Than Bank FDs?

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What is the eligibility criteria?

An account under SCSS can be opened only by an individual citizen over 60 years. Either individually or jointly with your spouse, you can open an SCSS account. As eligibility criteria under this retirement scheme are determined in regard to only the primary account holder, a second holder (spouse) even below the age of 60 can only be considered to open a joint account. As the first holder, the spouse can also open an account under SCSS if the standards are met. At any post office or the approved branches of permitted banks, you can open an SCSS account. Even before the age of 60, but not before the age of 55, those who have obtained voluntary retirement or who have retired on superannuation can open this account. In both situations, the account must be activated within one month of the date from which the retirement payouts are received. In the case of former defence service staff, the same could be opened at the age of 50 years. Deposits rendered by individuals under 60 years of age are capped at Rs 15 lakhs.

Nomination facility and deposit limit

Nomination facility and deposit limit

For your SCSS account, you are entitled to add a nominee on your behalf. The nomination can be rendered initially or may be made, cancelled or changed at any time during your lifespan. Under SCSS, you can open multiple accounts as well, but all accounts are required to have deposits of a limit of Rs 15 lakh, placed together at any particular time. With respect only to the first holder, the limit of Rs 15 lakh is determined.

Premature withdrawal option

Premature withdrawal option

The overall tenure of the SCSS is five years, and can only be extended once over a period for a block of 3 years respectively. You are entitled to withdraw the money early after opening the account, but not until the expiration of one year. A penalty of 1.5 per cent of the deposit amount is deducted if the account is closed before the second year. The applicable penalty is 1 per cent for accounts closed after two years but before 5 years from the date of issuance of the account.

Return

Return

Under this scheme, the interest rate is declared in advance by the government for each quarter. The rate available for the entire term shall be the rate existing at the time the deposits are made and shall not be liable to adjustment for the deposit tenure. The interest rate announced for the quarter of March-21 is 7.4 per cent per annum. Without any cumulative option, the interest is due quarterly under SCSS. The first interest shall be paid from the date of making the deposit until the end of the quarter and for each quarter thereafter.

Taxation

Taxation

You can claim a deduction under Section 80C up to Rs 1.50 lakh per year against the contributions made towards SCSS. This clause is relevant as other strategies under Section 80C for seeking tax benefits, such as EPF, bank FDs and so on. The interest earned under SCSS is subject to taxation. If the amount of interest crosses Rs 50,000 in a year for senior citizen account holders, the bank will subtract TDS @ 10 per cent. The maximum cap for TDS is Rs 40,000 per annum for others. If interest crosses the TDS limit for the entire year, you can submit Form 15H/15G to the bank or post office in order to avoid TDS. You are allowed to claim an exemption of up to Rs 50,000 for interest received under this scheme, along with other interest gained by you from banks and post offices under Section 80 TTB, if you are a senior citizen and have made deposits under this scheme.

Withdrawal option in case of your death

Withdrawal option in case of your death

In the case of the death of a single holder, if a nomination is made under this scheme, the deposit amount including interest is paid to the nominee. After pursuing a painful process, the legitimate hairs can claim it in case nomination is not made by the primary holder. Thus, at the time of making the deposits, it is important to have the nominee added. The spouse gains the ability to proceed with the scheme in the case of joint accounts. If the spouse does not wish to proceed, the capital can be withdrawn respectively. The spouse has to withdraw the additional deposit in case the cumulative cross the threshold of Rs 15 lakhs.

How to open a senior citizen savings scheme account?

How to open a senior citizen savings scheme account?

An SCSS account can be opened by filling the application form and depositing a minimum of Rs 1,000 or any in multiples of Rs 1,000, not surpassing Rs 15 lakh. To know more please click here.

SCSS Vs Bank FD Rates

SCSS Vs Bank FD Rates

Because you receive better returns on deposits under SCSS than those commonly available investment vehicles such as bank FDs, senior citizens who need risk-free returns on their investments should consider SCSS first. Below is an interest rate comparison of SCSS and bank FDs.

Bank FDs/SCSS Tenure ROI
Senior Citizen Savings Scheme 5 years 7.40%
SBI Special FD Scheme 5 Years to 10 years 6.20%
HDFC Bank Senior Citizen Care FD 5 years and 1 day to 10 years 6.25%
ICICI Bank Golden Years FD 5 years and 1 day to 10 years 6.30%
Bank of Baroda Senior Citizens Saving Scheme 5 Years to 10 years 6.25%



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What Makes Me To Opt Senior Citizen Savings Scheme Than Bank FDs?

Personal Finance

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What is the eligibility criteria?

An account under SCSS can be opened only by an individual citizen over 60 years. Either individually or jointly with your spouse, you can open an SCSS account. As eligibility criteria under this retirement scheme are determined in regard to only the primary account holder, a second holder (spouse) even below the age of 60 can only be considered to open a joint account. As the first holder, the spouse can also open an account under SCSS if the standards are met. At any post office or the approved branches of permitted banks, you can open an SCSS account. Even before the age of 60, but not before the age of 55, those who have obtained voluntary retirement or who have retired on superannuation can open this account. In both situations, the account must be activated within one month of the date from which the retirement payouts are received. In the case of former defence service staff, the same could be opened at the age of 50 years. Deposits rendered by individuals under 60 years of age are capped at Rs 15 lakhs.

Nomination facility and deposit limit

Nomination facility and deposit limit

For your SCSS account, you are entitled to add a nominee on your behalf. The nomination can be rendered initially or may be made, cancelled or changed at any time during your lifespan. Under SCSS, you can open multiple accounts as well, but all accounts are required to have deposits of a limit of Rs 15 lakh, placed together at any particular time. With respect only to the first holder, the limit of Rs 15 lakh is determined.

Premature withdrawal option

Premature withdrawal option

The overall tenure of the SCSS is five years, and can only be extended once over a period for a block of 3 years respectively. You are entitled to withdraw the money early after opening the account, but not until the expiration of one year. A penalty of 1.5 per cent of the deposit amount is deducted if the account is closed before the second year. The applicable penalty is 1 per cent for accounts closed after two years but before 5 years from the date of issuance of the account.

Return

Return

Under this scheme, the interest rate is declared in advance by the government for each quarter. The rate available for the entire term shall be the rate existing at the time the deposits are made and shall not be liable to adjustment for the deposit tenure. The interest rate announced for the quarter of March-21 is 7.4 per cent per annum. Without any cumulative option, the interest is due quarterly under SCSS. The first interest shall be paid from the date of making the deposit until the end of the quarter and for each quarter thereafter.

Taxation

Taxation

You can claim a deduction under Section 80C up to Rs 1.50 lakh per year against the contributions made towards SCSS. This clause is relevant as other strategies under Section 80C for seeking tax benefits, such as EPF, bank FDs and so on. The interest earned under SCSS is subject to taxation. If the amount of interest crosses Rs 50,000 in a year for senior citizen account holders, the bank will subtract TDS @ 10 per cent. The maximum cap for TDS is Rs 40,000 per annum for others. If interest crosses the TDS limit for the entire year, you can submit Form 15H/15G to the bank or post office in order to avoid TDS. You are allowed to claim an exemption of up to Rs 50,000 for interest received under this scheme, along with other interest gained by you from banks and post offices under Section 80 TTB, if you are a senior citizen and have made deposits under this scheme.

Withdrawal option in case of your death

Withdrawal option in case of your death

In the case of the death of a single holder, if a nomination is made under this scheme, the deposit amount including interest is paid to the nominee. After pursuing a painful process, the legitimate hairs can claim it in case nomination is not made by the primary holder. Thus, at the time of making the deposits, it is important to have the nominee added. The spouse gains the ability to proceed with the scheme in the case of joint accounts. If the spouse does not wish to proceed, the capital can be withdrawn respectively. The spouse has to withdraw the additional deposit in case the cumulative cross the threshold of Rs 15 lakhs.

How to open a senior citizen savings scheme account?

How to open a senior citizen savings scheme account?

An SCSS account can be opened by filling the application form and depositing a minimum of Rs 1,000 or any in multiples of Rs 1,000, not surpassing Rs 15 lakh. To know more please click here.

SCSS Vs Bank FD Rates

SCSS Vs Bank FD Rates

Because you receive better returns on deposits under SCSS than those commonly available investment vehicles such as bank FDs, senior citizens who need risk-free returns on their investments should consider SCSS first. Below is an interest rate comparison of SCSS and bank FDs.

Bank FDs/SCSS Tenure ROI
Senior Citizen Savings Scheme 5 years 7.40%
SBI Special FD Scheme 5 Years to 10 years 6.20%
HDFC Bank Senior Citizen Care FD 5 years and 1 day to 10 years 6.25%
ICICI Bank Golden Years FD 5 years and 1 day to 10 years 6.30%
Bank of Baroda Senior Citizens Saving Scheme 5 Years to 10 years 6.25%



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RailTel Corporation IPO Opens Today: Most Brokerages’ Give A Subscribe Rating To The Issue

Personal Finance

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Investment

oi-Roshni Agarwal

|

RailTel Corporation will open its public issue today for subscription by investors. Here’s all the details you should know if you are considering subscribing to the issue:

Issue details:

The company aims to aggregate a total of Rs. 819.24 crore through the issue and the proceeds shall go to the centre. The issue will close on February 18.

About the company:

RailTel is the information and communications technology (ICT) infrastructure provider. This is the country’s leading telecom infrastructure provider with optic fiber network throughout the country.

RailTel IPO Opens: Should You Subscribe For Listing Gains Or Long Term?

Financials:

In FY20, the company reported the highest net profit margin among telecom companies and key IT/ICT companies in India, with a net profit margin of 12.50 percent while its net profit margin was 8.48 percent in the six months ended September 2020. . It reported a 7.5 percent CAGR rise in topline. EBITDA margin expanded from 27 percent in FY18 to 29.6 percent in FY20. Adjusted PAT increased by 8.9 percent CAGR over FY18-20.

The company has been consistently paying dividend since FY2008.

Brokerages’ view:

All of the brokerages have given a ‘Subscribe’ to the issue as it is a 100% debt free company, state run Mini Rata CPSE, consistent dividend record, better margins as well as return rations in comparison to peers. The company derives most of its revenue from the telecom division and the rest from the railways’.

“RailTel, if it performs efficiently can benefit from the 5G growth in India from a fiberisation needs’ perspective. It could also play a key role in digital transformation of the railways,” said Nirali Shah, Head of Equity Research at Samco Securities.

Besides, “COVID-19 has had a minimal impact on the telecom industry and has in fact triggered growth for certain players due to increased data usage and VPN services for people working from home. Since RailTel is a debt-free company and pays consistent dividends it could witness some traction,” she added.

But for long-term investors, there are a few red flags, she feels. “Firstly, the company has delivered single digit revenue and PAT CAGR of 7.5 percent and 2.5 percent, respectively, from FY18 to FY20. There is high dependence on the government entities and concentration risk given that 23.8 percent of its revenues come from top 3 customers. Its presence in a highly regulated industry is another cause for concern,” she explained.

Overall, “the company is fairly priced at its FY20 P/E of 21.3 times. It has been commanding a good grey market premium indicating the offer will sail through but keeping the risks in mind, we recommend investors to subscribe for listing gains only,” Nirali Shah advised.

Angel Broking also feels RailTel is going to play a key role in digital transformation of Indian Railways. “The company’s margins & return ratios are better compared to other telecom players in India. There are no listed peers for the company. The issue has been priced at 21.4x PE on a FY20 trailing basis, which is quite reasonable by looking at the strong future growth rates of the company,” said the brokerage which expects a good listing for the company.

“We are positive on the long-term prospects of the industry as well as the company, we recommend subscribing to the RailTel IPO for long term as well as for listing gains,” the brokerage said.

Grey market premium:

Ahead of its IPO, the shares of RailTel were trading at a premium of 48 percent. And amid such a momentum when markets are scaling new highs there is seen to be a decent listing for the scrip of RailTel. Also, the issue is being deemed from the long term perspective.

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How To Transfer National Savings Certificates From One Person To Another?

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NSCs Transfer Rules

  • Only after completion of at least one year from the date of issuance NSC can be transferred from one person to another.
  • An individual who is looking to transfer NSC is required to fill Form NC 34 completely. Specifics such as the name of the transferee, the name of the transferor, the serial number of the certificate, the amount of the certificate, the date of issue and the holder’s signature are required to fill in Form NC 34.
  • The holder who is going to transfer is also required to have KYC documents such as a photograph, address, valid proof of identity and a certified declaration in the specified format in order to comply with the regulations relating to the authorization of the NSC.
  • In the post office, the old certificate is then validated by the designated individual with the postmaster’s stamp and the post office’s date seal. In addition, a fee for the transfer of a certificate will be charged by the post office.

Conditions to be met by the holder

Conditions to be met by the holder

Only after a year from the issuance of the certificate a certificate can be transferred. This clause is not applicable if the transfer is rendered on behalf of the court to the relative, legitimate successor of the deceased holder or to the existing holder after the death of the joint holder. A transferee must be eligible to purchase a certificate in order to transfer the certificate successfully. Specifics such as the name of the transferor, the name of the transferee, certificate specifics, serial numbers, amount and date of issue must be specified. In the case of a minor, the form has to be signed by the holder or guardian. For the transfer of savings certificates from one individual to another, the applicant must fill Form NC 34. A fee, if required, may be imposed by the post office for the transfer procedure.

KYC norms and transfer process

KYC norms and transfer process

In order to conform with the laws relating to the issuance of the NSC, the transferee must have a signed declaration in the specified format. In addition, the transferee must have KYC records such as a photograph, address and proof of identification and file the KYC form. As the old certificate is not discharged the old holder’s name is rounded and the current holder’s name is recorded on the old certificate. The designated postmaster then approves it. The postmaster’s stamp and the post office’s date stamp are also placed to make the transfer process complete.

Points to note

Points to note

  • For each set of a certificate, a specific application is needed.
  • Only for the total amount of the certificate, the transfer can be done.
  • The amount can’t be partially transferred in the NSC transfer process.
  • If the transfer has been rendered to a relative, legitimate successor of a deceased purchaser, existing holders on the death of joint holders and on-court directives NSC can be transferred several times during the maturity period.
  • Before proceeding with an NSC transfer, the transferee must be eligible to purchase the certificate.



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Earn Regular Monthly Income with SBI Annuity Deposit Scheme

Personal Finance

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Investment

oi-Sneha Kulkarni

|

When you have a disposable sum in your hands, invest in a monthly or quarterly interest payment scheme so that you can earn a steady stream of income. SBI Annuity Deposit Plan is a simple scheme where investing a lump sum amount now, promises fixed recurring monthly revenue in the future.

SBI Annuity Deposit Plan

The SBI Annuity Deposit Plan requires the depositor to pay a one-time lump sum amount and to receive the same in Equated Monthly Instalments (EMIs). Includes a share of the principal sum and interest on the reduction of the principal amount, compounded every quarter and discounted every month.

Who can open SBI Annuity Deposit Plan?

Any individuals, including minors, can open the SBI Annuity Deposit Plan. Mode of holding could be singly or jointly. While any customer in the NRE or NGO categories cannot open the SBI Annuity Deposit Scheme

Earn Regular Monthly Income with this SBI Scheme

Features of SBI Annuity Deposit Plan

1. SBI Annuity Deposit Plan comes with a different period of deposit.

2. Individuals can choose from 36/60/84 or 120 months.

3. SBI Annuity Deposit Plan is available at all branches all over India.

4. The minimum monthly annuity Rs 1000/- for the relevant period.

5. The minimum amount of deposit should not be below Rs 25,000/-

6. There is no limit on the maximum deposit

7. Interest rate is applicable as per term deposits rate

8. The interest rate to all Senior Citizens of age 60 years and above will be 0.50% above the applicable rate.

9. Individuals can also opt for Overdraft or loan up to 75% of the balance amount of the annuity.

10.SBI Annuity deposit scheme is accessible for 3, 5, 7, and 10 years. SBI also offers a nomination facility with the scheme.

How much to invest for monthly income?

SBI pays an interest rate of 5.40% on deposits matured in five to ten years. For FDs aged three or less than five years, SBI offers an interest rate of 5.30%.

Here is an example that will explain how it works:

Investment Phase Payout Phase
Investment Phase Tenure Rate of Interest Total Corpus Lump-Sum Payment Tenure Monthly Payout
Rs 1,00,000.00 24 months 5.35% 110093 Nil 24 months 4897
Rs 2,00,000.00 24 months 5.35% 220186 Nil 24 months 9793

Disclaimer: The figures and data used in the above calculation are for reference purposes only.

Individuals can opt for this option from a savings account, current account, or OD account to open their Annuity bank account. The account chosen for debiting should be valid transactional a/c via the Internet Banking channel and should not be stopped, dormant, or locked account.

Payment will begin on the anniversary date of the month. If that day is non-existent (29th, 30th, and 31st), it will be paid on the first day of the next month.

Premature payment is allowed up to a maximum volume of Rs.15 lakes. However, an early withdrawal is provided only in the event of the investor’s death.

Should you opt?

Generally, members of the working class do not have lump-sum amounts. In such cases, most people are protecting their future by investing in a recurring deposit (RD). However, if you have enough money and you are looking for a steady income without any risk, this is the scheme for you.



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Earn Regular Monthly Income with SBI Annuity Deposit Scheme

Personal Finance

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Read More/Less


Investment

oi-Sneha Kulkarni

|

When you have a disposable sum in your hands, invest in a monthly or quarterly interest payment scheme so that you can earn a steady stream of income. SBI Annuity Deposit Plan is a simple scheme where investing a lump sum amount now, promises fixed recurring monthly revenue in the future.

SBI Annuity Deposit Plan

The SBI Annuity Deposit Plan requires the depositor to pay a one-time lump sum amount and to receive the same in Equated Monthly Instalments (EMIs). Includes a share of the principal sum and interest on the reduction of the principal amount, compounded every quarter and discounted every month.

Who can open SBI Annuity Deposit Plan?

Any individuals, including minors, can open the SBI Annuity Deposit Plan. Mode of holding could be singly or jointly. While any customer in the NRE or NGO categories cannot open the SBI Annuity Deposit Scheme

Earn Regular Monthly Income with this SBI Scheme

Features of SBI Annuity Deposit Plan

1. SBI Annuity Deposit Plan comes with a different period of deposit.

2. Individuals can choose from 36/60/84 or 120 months.

3. SBI Annuity Deposit Plan is available at all branches all over India.

4. The minimum monthly annuity Rs 1000/- for the relevant period.

5. The minimum amount of deposit should not be below Rs 25,000/-

6. There is no limit on the maximum deposit

7. Interest rate is applicable as per term deposits rate

8. The interest rate to all Senior Citizens of age 60 years and above will be 0.50% above the applicable rate.

9. Individuals can also opt for Overdraft or loan up to 75% of the balance amount of the annuity.

10.SBI Annuity deposit scheme is accessible for 3, 5, 7, and 10 years. SBI also offers a nomination facility with the scheme.

How much to invest for monthly income?

SBI pays an interest rate of 5.40% on deposits matured in five to ten years. For FDs aged three or less than five years, SBI offers an interest rate of 5.30%.

Here is an example that will explain how it works:

Investment Phase Payout Phase
Investment Phase Tenure Rate of Interest Total Corpus Lump-Sum Payment Tenure Monthly Payout
Rs 1,00,000.00 24 months 5.35% 110093 Nil 24 months 4897
Rs 2,00,000.00 24 months 5.35% 220186 Nil 24 months 9793

Disclaimer: The figures and data used in the above calculation are for reference purposes only.

Individuals can opt for this option from a savings account, current account, or OD account to open their Annuity bank account. The account chosen for debiting should be valid transactional a/c via the Internet Banking channel and should not be stopped, dormant, or locked account.

Payment will begin on the anniversary date of the month. If that day is non-existent (29th, 30th, and 31st), it will be paid on the first day of the next month.

Premature payment is allowed up to a maximum volume of Rs.15 lakes. However, an early withdrawal is provided only in the event of the investor’s death.

Should you opt?

Generally, members of the working class do not have lump-sum amounts. In such cases, most people are protecting their future by investing in a recurring deposit (RD). However, if you have enough money and you are looking for a steady income without any risk, this is the scheme for you.



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How To Transfer National Savings Certificates From One Person To Another?

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Planning

oi-Vipul Das

|

The National Savings Certificate (NSC) is a tax-saving investment among the post office small savings schemes. As part of a tax-saving investment, investors park their capital towards NSCs. An individual contributed towards National Savings Certificates is allowed under Section 80C of the Income Tax Act to seek a tax deduction of up to Rs 1.5 lakh. When it comes to tax-saving instruments apart from NSC there are also some secure vehicles such as Voluntary Provident Fund (VPF), Public Provident Fund (PPF), Employees Provident Fund (EPF), and so on that not only provide secure returns but also provide tax deduction up to Rs 1.5 lakh under section 80C. At a present interest rate of 6.8% which is compounded annually and payable at the end of the maturity term one can invest in NSCs. A National Savings Certificate can be transferred only once during its entire period, as per the existing NSC transfer regulations. The NSC VIII Issue has a five-year period of maturity.

How To Transfer National Savings Certificates From One Person To Another?

NSC Transfer Rules

  • Only after completion of at least one year from the date of issuance NSC can be transferred from one person to another.
  • An individual who is looking to transfer NSC is required to fill Form NC 34 completely. Specifics such as the name of the transferee, the name of the transferor, the serial number of the certificate, the amount of the certificate, the date of issue and the holder’s signature are required to fill in Form NC 34.
  • The holder who is going to transfer is also required to have KYC documents such as a photograph, address, valid proof of identity and a certified declaration in the specified format in order to comply with the regulations relating to the authorization of the NSC.
  • In the post office, the old certificate is then validated by the designated individual with the postmaster’s stamp and the post office’s date seal. In addition, a fee for the transfer of a certificate will be charged by the post office.

Conditions to be met by the holder

Only after a year from the issuance of the certificate a certificate can be transferred. This clause is not applicable if the transfer is rendered on behalf of the court to the relative, legitimate successor of the deceased holder or to the existing holder after the death of the joint holder. A transferee must be eligible to purchase a certificate in order to transfer the certificate successfully. Specifics such as the name of the transferor, the name of the transferee, certificate specifics, serial numbers, amount and date of issue must be specified. In the case of a minor, the form has to be signed by the holder or guardian. For the transfer of savings certificates from one individual to another, the applicant must fill Form NC 34. A fee, if required, may be imposed by the post office for the transfer procedure.

KYC norms and transfer process

In order to conform with the laws relating to the issuance of the NSC, the transferee must have a signed declaration in the specified format. In addition, the transferee must have KYC records such as a photograph, address and proof of identification and file the KYC form. As the old certificate is not discharged the old holder’s name is rounded and the current holder’s name is recorded on the old certificate. The designated postmaster then approves it. The postmaster’s stamp and the post office’s date stamp are also placed to make the transfer process complete.

Points to note

  • For each set of a certificate, a specific application is needed.
  • Only for the total amount of the certificate, the transfer can be done.
  • The amount can’t be partially transferred in the NSC transfer process.
  • If the transfer has been rendered to a relative, legitimate successor of a deceased purchaser, existing holders on the death of joint holders and on-court directives NSC can be transferred several times during the maturity period.
  • Before proceeding with an NSC transfer, the transferee must be eligible to purchase the certificate.



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Top Rated Corporate FDs With The Highest Interest Rates Up To 9%

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For whom a company FD can be the best

You can consider company FDs if you have short-term financial priorities but do not want riskier alternatives such as stocks or mutual funds in your portfolio. It is a fact that company FDs offer higher returns than bank FDs, but for deposit insurance of up to Rs. 5 lakh, which is only for bank FDs, company FDs are not covered by the DICGC. This is now a field of importance but to minimize your concern you should verify the credit fitness of the respective organization to fix it.

Documents required to invest in corporate FDs

Documents required to invest in corporate FDs

In order to invest in corporate FDs one must keep the below given basic documents ready:

  • Identity proof: Aadhaar card, PAN, Driving License, Voter ID Card, 2 colour passport-size photographs
  • Residence proof: Aadhaar, Voter id card, ration card, utility bills
  • Income proof: Bank statement, salary proof, NREGA job card, employee ID and IT return

Pros of investing in corporate FDs

Pros of investing in corporate FDs

Corporate FDs operate with the promise of assured returns and versatility of tenure choices, comparable to banks. And, a higher interest rate than bank FDs is also provided by corporate FDs. But what are the other pros of it, let’s check out.

  • Like bank fixed deposits, one of the greatest advantages of investing in corporate fixed deposits is that they have the promise of an assured return. And, you can even know the precise amount that you will earn after maturity at the time of the investment itself.
  • Company fixed deposits give a marginally higher interest rate of 0.25 per cent for elderly people just like bank deposits. This is an added benefit for senior citizens who are elderly and dependent on fixed deposit returns for their retirement.
  • Usually, the duration of a corporate fixed deposit varies from one to five years. And within that set, you have the freedom to select any period. The interest rate will, though, vary accordingly, – for example the longer the tenure, the better the returns.

Cons of corporate FDs

Cons of corporate FDs

To invest in AAA-rated corporate fixed deposits are always recommended by us to the investors. But there are some drawbacks which must also be considered by the depositors.

  • Corporate FDs, if compared to bank FDs, do not bear any capital security guarantee.
  • Neither these instruments ensure any capital protection nor any interest payouts. If a company faces financial pressure, an investor may lose his capital.
  • Return from corporate FDs is applied to the income of the investor and charged as per the investor’s tax slab rate. Corporate FDs do not seem enticing to those who fall inside the higher tax bracket.
  • Usually, corporate FDs come with a lock-in duration of three years. No facility for partial withdrawal is open. In the case of making a withdrawal before the FD matures, an investor will also have to lose some interest.

Corporate FD Rates

Corporate FD Rates

Corporates Tenure ROI in % Rating(w.e.f. July 2020)
Hawkins Cooker FD 12-36 9 MAA/Stable by ICRA
Shriram City Union Finance 12-60 8.09 MAA+/Stable by ICRA and tAA by Ind-Ra
Shriram Transport Finance 12-60 8.09 FAAA/Negative by CRISIL,MAA+/Stable by ICRA,tAA+/Stable by Ind-Ra
HUDCO 12-60 7.3 MAAA/Stable by ICRA, AAA by CARE,tAAA by Ind-Ra
PNB Housing Finance 12-60 6.70 FAAA/Stable by CRISIL and MAAA/Stable by ICRA
Bajaj Finance 12-120 7.00 CRISIL FAA+/Negative, AA/Stable by CARE
Sundaram Home Finance 36-60 6.25 FAAA/Stable by CRISIL , MAAA/Stable by ICRA
Sundaram Finance 12 6.22 FAAA/Stable by CRISIL
HDFC 33-66 6.20 FAAA/Stable by CRISIL, MAAA/Stable by ICRA
Mahindra Finance 12-60 5.9 FAAA/Stable by CRISIL
ICICI Home Finance 12-120 6.10 FAAA/Stable by CRISIL, MAAA/Stable by ICRA and AAA by CARE
LIC Finance 12-60 5.75 FAAA/Stable by CRISIL

Conclusion

Conclusion

Based on how good they are in every aspect, ratings such as AAA, AA, BBB, and so on are given to the corporations. The highest rating is AAA which reveals that the corporation has a strong capital structure. Different credit rating firms, such as CRISIL, ICRA and CARE, specify the credit performance of these non-banking financial companies (NBFCs). Check for an acceptable ‘Stable’ grade from credit-rating companies before investing. You can rethink if it’s less than standard. Invest in a high corporate fixed deposit if you have a target that needs to be reached within 1 to 5 years. This gives you the stability of a fixed-income tool and also offers a better yield than bank FDs.



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Top Rated Corporate FDs With The Highest Interest Rates Up To 9%

Personal Finance

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For whom a company FD can be the best

You can consider company FDs if you have short-term financial priorities but do not want riskier alternatives such as stocks or mutual funds in your portfolio. It is a fact that company FDs offer higher returns than bank FDs, but for deposit insurance of up to Rs. 5 lakh, which is only for bank FDs, company FDs are not covered by the DICGC. This is now a field of importance but to minimize your concern you should verify the credit fitness of the respective organization to fix it.

Documents required to invest in corporate FDs

Documents required to invest in corporate FDs

In order to invest in corporate FDs one must keep the below given basic documents ready:

  • Identity proof: Aadhaar card, PAN, Driving License, Voter ID Card, 2 colour passport-size photographs
  • Residence proof: Aadhaar, Voter id card, ration card, utility bills
  • Income proof: Bank statement, salary proof, NREGA job card, employee ID and IT return

Pros of investing in corporate FDs

Pros of investing in corporate FDs

Corporate FDs operate with the promise of assured returns and versatility of tenure choices, comparable to banks. And, a higher interest rate than bank FDs is also provided by corporate FDs. But what are the other pros of it, let’s check out.

  • Like bank fixed deposits, one of the greatest advantages of investing in corporate fixed deposits is that they have the promise of an assured return. And, you can even know the precise amount that you will earn after maturity at the time of the investment itself.
  • Company fixed deposits give a marginally higher interest rate of 0.25 per cent for elderly people just like bank deposits. This is an added benefit for senior citizens who are elderly and dependent on fixed deposit returns for their retirement.
  • Usually, the duration of a corporate fixed deposit varies from one to five years. And within that set, you have the freedom to select any period. The interest rate will, though, vary accordingly, – for example the longer the tenure, the better the returns.

Cons of corporate FDs

Cons of corporate FDs

To invest in AAA-rated corporate fixed deposits are always recommended by us to the investors. But there are some drawbacks which must also be considered by the depositors.

  • Corporate FDs, if compared to bank FDs, do not bear any capital security guarantee.
  • Neither these instruments ensure any capital protection nor any interest payouts. If a company faces financial pressure, an investor may lose his capital.
  • Return from corporate FDs is applied to the income of the investor and charged as per the investor’s tax slab rate. Corporate FDs do not seem enticing to those who fall inside the higher tax bracket.
  • Usually, corporate FDs come with a lock-in duration of three years. No facility for partial withdrawal is open. In the case of making a withdrawal before the FD matures, an investor will also have to lose some interest.

Corporate FD Rates

Corporate FD Rates

Corporates Tenure ROI in % Rating(w.e.f. July 2020)
Hawkins Cooker FD 12-36 9 MAA/Stable by ICRA
Shriram City Union Finance 12-60 8.09 MAA+/Stable by ICRA and tAA by Ind-Ra
Shriram Transport Finance 12-60 8.09 FAAA/Negative by CRISIL,MAA+/Stable by ICRA,tAA+/Stable by Ind-Ra
HUDCO 12-60 7.3 MAAA/Stable by ICRA, AAA by CARE,tAAA by Ind-Ra
PNB Housing Finance 12-60 6.79 FAAA/Stable by CRISIL and MAAA/Stable by ICRA
Bajaj Finance 12-120 6.5 CRISIL FAA+/Negative, AA/Stable by CARE
Sundaram Home Finance 36-60 6.22 FAAA/Stable by CRISIL , MAAA/Stable by ICRA
Sundaram Finance 12 6.22 FAAA/Stable by CRISIL
HDFC 33-66 6.05 FAAA/Stable by CRISIL, MAAA/Stable by ICRA
Mahindra Finance 12-60 5.9 FAAA/Stable by CRISIL
ICICI Home Finance 12-120 5.9 FAAA/Stable by CRISIL, MAAA/Stable by ICRA and AAA by CARE
LIC Finance 12-60 5.6 FAAA/Stable by CRISIL

Conclusion

Conclusion

Based on how good they are in every aspect, ratings such as AAA, AA, BBB, and so on are given to the corporations. The highest rating is AAA which reveals that the corporation has a strong capital structure. Different credit rating firms, such as CRISIL, ICRA and CARE, specify the credit performance of these non-banking financial companies (NBFCs). Check for an acceptable ‘Stable’ grade from credit-rating companies before investing. You can rethink if it’s less than standard. Invest in a high corporate fixed deposit if you have a target that needs to be reached within 1 to 5 years. This gives you the stability of a fixed-income tool and also offers a better yield than bank FDs.



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