FD Rates: Corporate FD rates go up, offer 175-300 bps higher than some banks

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Mumbai: Leading finance companies Have started raising interest rates on its deposits as the Reserve Bank of India has signaled a tough monetary policy in the coming months in view of the pick-up in inflation. HDFCAnd PNB Housing Finance It has increased its deposit rates by 10-25 basis points across various tenors, but analysts say investors should wait more before locking their money into longer tenures.

“Even though companies have increased deposit rates several times, the quantum of increase in individual sectors is low in the range of 10-25 basis points. maturities to measure the depth of Market And see how much money they can collect,” said Jujar Gabajiwala, director,

securities.

Corp FD rates hiked, some offer 175-300 bps more than banksagencies

HDFC Ltd and Bajaj Finance, both top-rated companies, have increased deposit rates for the third time in the last few months. HDFC has increased deposit rates by 20 basis points for deposits of 12-36 months and 10 basis points for deposits of 36-120 months with effect from June 15, Bajaj Finance has increased deposit rates for tenures of 1-5 years. While rates were increased by 25 basis points across all tenors except for 48-59-month maturity, where it has increased rates by 10 basis points.
Fixed deposits with finance companies are popular among small savers, mainly retirees, who want simple products and regular income from their savings. Retail investors, who have seen their returns from equities under pressure as of late, may also consider these products as interest rates strengthening. These deposits fetch 175-300 basis points more interest than a large bank.

A 44-month deposit from Bajaj Finance pays 7.35%, while a

The FD pays 5.6 per cent for a tenure of 3-5 years, giving the investor an extension of 175 basis points on bank deposits. Deposit rates are higher for small finance companies with low credit ratings. Given that rate increase reserve Bank of India It may not be over yet, investors should expand their investments and not invest all the money in long term deposits at this time.

Anoop Bhaiya, MD, Money Honey Financial Services said, “With more interest rates expected to hike in the next 6-9 months, fixed deposit investors would be better off investing in a mix of short term and long term deposits.” “Investors can allocate around 60% for a shorter tenure of around 12-18 months and the remaining 40% for a tenure of 36-60 months.”

Analysts said individuals can consider Bajaj Finance’s 44-month deposit, which is 7.35%, HDFC Ltd’s 18-month deposit with 6.15% and 36-month deposit receiving 7.9% to begin with To do. Senior citizens get 25-50 basis points higher returns on these deposits.

Bhaiya advised investors to stick to AAA-rated deposits and spread their investments across different companies.

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