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Looking to invest in fixed deposits to earn regular income? With interest rates headed downhill, it’s time to lock into the best rates available right now.
Go for NBFC depositsBanks have slashed fixed deposit rates across tenures by 75-100 basis points or even more since last September. Many non-banking finance companies (NBFCs) too have cut rates. But they still offer rates higher than banks.
With interest rates not expected to look up in the near-to-medium term, you can lock into two to three year NBFC deposits offering relatively good returns now. While these are riskier than bank FDs, you can minimise your risk by opting only for AAA-rated NBFC deposits.
Among the top-rated ones, FDs of Dewan Housing Finance (DHFL), Shriram Transport Finance (STF) and M&M Financial Services are worth considering for different payout options.
For monthly incomeTwo- and three-year deposits of DHFL and STF respectively offer the best rates for monthly payouts. DHFL’s two-year deposits offer 9.10 per cent, with senior citizens getting 0.25 percentage points higher. STF gives a tad higher — 9.11 per cent — on its monthly payout option for its three-year deposits.
But STF does not have a preferential interest rate for senior citizens. So seniors looking for monthly income are better off with DHFL.
For quarterly incomeIf you are interested in quarterly payouts, you have yet another option in M&M Financial Services. For a two-year fixed deposit, you can either invest with DHFL or M&M Financial Services, both of which offer 9.15 per cent.
But, if you want a three-year deposit, STF offers 9.18 per cent. Again, senior citizens are better off with DHFL or MMFSL, both of which offer an additional 0.25 percentage points over 9.15 per cent.
For annual and bi-annualIf you want to receive interest payments every six months, DHFL is your best deal, irrespective of whether you choose the two- or three-year deposit. You can earn 9.3 per cent on these deposits. For yearly payouts, DHFL gives you 9.50 per cent on a two-year deposit, the highest across similarly-rated FDs. If you want to invest in a three-year FD, you can choose between DHFL and STF, both of which offer 9.5 per cent. Of course, if you are a senior citizen, go for DHFL.
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