The Hindu Business Line : Where fixed deposits give higher rates

IN a market that is fast losing steam, a group of companies is raising fixed deposits at steep rates - as high as 10 per cent for one year in select cases or even higher for those who stay invested for longer periods. GI Power Corporation, Unitech Ltd and Singer India Ltd are among the manufacturing companies that have been making news with 12-month FD offerings, all at 10 per cent. Investors in Singer India can in fact get 10.5 per cent and 11 per cent for 24 months and 36 months, respectively.

These offers stand out in a scenario marked by declining rates on fixed-duration products, say investment circles, adding that deposits from most manufacturing companies carry rates only in the 7-8.5 per cent range. Lists of high payers, compiled by collecting agencies like Bajaj Capital, include companies such as Escorts, Mahavir Spinning, Ceat and Usha International. There are a good number of takers for their FDs, which, sources maintain, blissfully survive in the face of competition from mutual funds and small savings schemes offered by Post Offices.

"Investors generally like the concept of guaranteed returns. FDs, despite the clear drop in popularity, are still an important choice for them, especially if the rates are superior", says a source with a local distribution firm. Entities such as IDBI, HUDCO and NTPC offer rates ranging from 5.25 per cent (12-month, NTPC) to 6.25 per cent (36-month, IDBI).

It is also pointed out that schemes for senior citizens have also turned fairly popular, given the fact that investors here are provided a little more. Housing finance companies are readily identified as ones that offer an extra bit to seniors. These include HUDCO, Dewan Housing Finance, Birla Home Finance and PNB Housing Finance. HDFC and IDBI too are said to be part of this category.

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