13.73% Tamil Nadu Power Finance Fixed Deposit Scheme-How safe is this?

Tamil Nadu Power Finance FD Scheme13.73% Tamil Nadu Power Finance Fixed Deposit Scheme-How safe is this?

Tamil Nadu Power Finance and Infrastructure Limited offer Fixed Deposit scheme for 1 year to 5 years tenure. This is wholly owned by Govt. of Tamil Nadu. This offers 13.73% yield for 5 years tenure FD Scheme. How good is TN Power Finance FD Scheme? What are the features of TN Power Finance and Infrastructure FD Scheme? Are there any risks involved in it? This post is based on request from Arunkumar on suggest a topic.

About Tamil Nadu Power Finance and Infrastructure Limited

TN Power Finance is wholly owned by Govt. of Tamil Nadu. This is registered with RBI as Non Banking Finance company (NBFC) and into Hire Purchase Financing business. It mobilizes funds through attractive deposit schemes. Total deposits as of Feb-2014 are Rs 9,612 Crores with total of Rs 59.63 Lakh depositors.

Also Read: DHFL Fixed Deposit scheme offers 15.07% yield

Features of TN Power Finance FD Scheme

  • TN Power Finance FD scheme is available in Regular Interest Payment Scheme (RIPS) and cumulative Interest payment scheme (CIPS) options.
  • For regular interest payment scheme, Interest is compounded and paid, monthly, quarterly and Annually.
  • For cumulative scheme, interest is payable at maturity.
  • Minimum FD amount is Rs 10,000 and any amount in multiples of Rs 1,000 beyond this.
  • Deposits available for 1, 2, 3, 4 and 5 year tenure.
  • ECS facility available for payment of interest on regular payment interest deposits.
  • No TDS if the interest income is less than Rs 5,000 per annum
  • Investors can submit Form 15H/15G in case they do not want TDS to be deducted.

a) Interest rates of Regulat Interest Payment Scheme (RIPS)TN Power Finance FD Scheme-RIPS-Interest rates

Also Read: LIC Housing Finance FD Scheme offers up to 12% yield-Should you invest?

b) Interest rates of Cumulative Interest Payment Scheme (CIPS)TN Power Finance FD Scheme-CIPS-Interest rates

How to apply for TN Power Finance FD Scheme?

  • Download TN Power Finance FD Scheme application form here
  • Fill the form
  • Enclose necessary cheque for the deposit amount. In case you are outside Chennai, you need to take demand draft in the name of the company, payable at Chennai (You can deduct necessary DD charges)
  • In case you are 58 years of age, you need to attach relevant age proof to get a higher interest rate.
  • Applications containing thumb impressions cannot be submitted
  • Duly filled form along with Cheque/DD has to be sent to a company registered office address

What about pre-mature withdrawal?

Below are the guidelines for pre-mature withdrawal of TN Power Finance FD Scheme.

  • < 3 months – Cannot withdraw FD scheme
  • In case of death of application holder within 3 months, FD amount without interest would be returned to the nominee.
  • 3 months to 6 months – FD withdrawal allowed, however, no interest would be paid
  • 6 months to 1 year – Withdrawal allowed, but the rate of interest would be reduced by 3% of what the company is supposed to pay for a 1 year FD scheme
  • 1 year to 5 years – Withdrawal allowed, but the rate of interest would be reduced by 2% of what the company is supposed to pay as rate of interest for the period an investor has invested the money.

Also Read: Mahindra Finance FD Scheme is rated FAAA and offers 12% yield

Can NRI’s apply in this TN Power Finance FD Scheme?

Yes, NRI’s can apply for TN Power finance Fixed deposit scheme. However, any interest remittance would be done only to NRO /  NRE account. Interest paid cannot be repatriated outside India. Maximum eligible tenure would be for 36 months FD Scheme.

Are there any risks involved in this FD scheme?

Company fixed deposit schemes comes with risk.  The payment of interest and repayment of principal amount would depend on company performance. However, since TN Power Finance is wholly owned by the Government of Tamil Nadu, there is less risk. In case of any performance issue by the company, your payment may get delayed, but it would not be high risk like other public limited companies.

Why to invest?

  • Interest rates are high. Yield comes to 13.73% per annum for a 5 year FD scheme.
  • Company is making good profits, hence the interest payment would not be an issue.
  • Wholly owned by Govt. of Tamilnadu, hence safe to invest

Why not to invest

  • Nil

Complete details of TN Power Finance FD Scheme is available at their website

Conclusion: TN Power Finance FD Scheme offers good interest rates.  If you are medium to low risk appetite investor, you can look to invest in such safe investment option to get higher interest. 

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Suresh
Tamil Nadu Power Finance Fixed Deposit Scheme

Suresh KP

118 comments

  1. i would like to invest 10L.. Can u pls tell me which bank FD is best? and can i invest in TNPF? any one have account in this sector? pls share all.

  2. Hi Suresh
    I would like to get ur view on my query that if i want to invest approx 50 lakhs and want to generate a monthly income and live on it,what will be the safest mode,if it’s bank FDs then since only 1 lakh is secured by Govt. so shud i invest 50 different banks? what according to you wud be the best /safest & convenient strategy in my required scenario.plz advice.

    1. Anand, Rs 1 Lakh is not per FD or per bank. It is your overall FD’s across banks. You can adopt following strategies 1) Invest in 2-3 banks FD schemes 2) Invest in bank FD, Post office MIS scheme, MF debt funds 

      1. Thanks dear KP for ur reply plz tell me if i only keep the full amt in my Icici ac for convenience is it fine or will it be a bit risky?( 2)Are debt funds equally safes as bank fd ? Are liquid funds safer as psu bank fd/ savings ac as is claimed by certain articles? Thanx again for ur help…

        1. Awaiting ur reply dear Suresh on my above query also is it possible to have a monthly income option in debt funds? Nw bank fds are reducing interest rates my monthly income will be v less too!! Wat to do now dear ? I only hv 50 Lakh!

    2. guys no need for agent. Take DD favoring” TN Power Finance & Infra Development Corp. 2) Fill in the form, 3) take a copy of both for your reference, 4) Courier to Chennai address, 5) within 10-15 working days you FD will be issued.

  3. I had the similar experiance as no agent or contact person could be traced even in a big place like Delhi.

  4. Also the list of their Agent/Distributors seems to be very old as no phone numbers are working or are correct.
    Do you know any sensible & responsible Agent/Distributor of theirs whom one can deal with.

  5. I tried contacting people at Tamilnadu Power finance but no response as it happens in any other Govt owned company.
    I was not sure if they properly acknowledge submission of Form 15G. If they act like any other Govt owned entity that means TDS is sure to get cut.
    If such a thing happens at what rate TDS would be cut?

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