The Hindu Business Line : FD Options

Sundaram Finance: Investors looking at building a portfolio of fixed investments should consider exposures in the deposits of Sundaram Finance. It offers an interest rate of 7 per cent, 7.5 per cent and 8 per cent for one-, two- and three-year periods respectively. The rates appear reasonably attractive, especially on a risk-adjusted basis. As in terms of credit quality, Sundaram Finance is in the top bracket. The company has a portfolio of business in several areas of financial services. Its financials are in fine shape and investors need have no concern on any score. If you have funds that are likely to be needed over a twelve-month period, opt for the one-year deposit. Else, choose the three-year deposit and opt for the cumulative option.

JK Paper: An investment can be considered in the fixed-deposit programmes across tenures. As the paper business is subject to a high degree of cyclically, the longer tenures are risky. But the rates on offer appear to be attractive. The steady improvement in the company's financial profile also augurs well. The substantial reduction in the interest outgo and the replacement of high-cost debt with funds sourced at lower rates enhance the degree of comfort that is available to investors in the FD programme. JK Paper is also to set up a 60,000 tonnes per annum packaging board project and put through other upgradation programmes which would also lead to a scaling up of revenues.

We had earlier recommended that the three-year option could be avoided. With further confirmation over the past quarter that the financials are healthy, we believe that even this tenure can be considered as JK Paper is well placed to ride out a weak phase in the business cycle. The minimum amount is Rs 10,000. In the two- and three-year tenures, investors can opt for the cumulative option while the non-cumulative option appears appropriate for the one-year tenure.

United Bank of India: Senior citizens can consider investing in the long-term term deposit scheme of United Bank of India.

The bank has introduced a new term deposit bucket of between 7 and 10 years. It offers 7 per cent for such deposits for younger investors with senior citizens being offered 8 per cent.

This rate of 8 per cent is comparable to the yield on some of the post-office schemes such as th3e Post Office Monthly Income Scheme and Kisan Vikas Patra. The attractive yield is also applicable for a longer duration compared to such schemes. Investors can thus consider investing a small proportion of their surplus for a 10-year period in this scheme.

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