Shriram Transport Finance FD Scheme – Should you invest?
When banks are reducing fixed deposit interest rates quarter on quarter, Shriram Transport Finance has increased the interest rates on its Fixed Deposit Schemes from Apr-2018 onwards. Shriram Transport Finance FD Scheme now offers interest rates where the yield is as high as 10.08% per annum. We all know that debt mutual funds provide 7% to 10% returns, however the returns are not guaranteed. Hence, Shriram Transport Finance Fixed deposit scheme which are offering high yield along with high credit rating is attracting investors now. What are the interest rates and yield of Shriram Transport Finance FD Schemes? What are the features of this fixed deposit scheme? Should you opt for Shriram Transport Finance FD Scheme?
Also Read: Best Sector Mutual Funds to invest in India in 2018
Overview about Shriram Transport Finance Limited
Shriram Transport Finance is Non-Banking Finance Company (NBFC) which is into commercial vehicle finance in India.
Features of Shriram Transport Finance FD Scheme
The following are the key features of Shriram Transport Finance Fixed Deposit (FD) scheme:
1) This FD Scheme offers interest rates in the range of 7.39% to 8.25% per annum depending on the tenure of the scheme. The yield works out in the range of 7.65% to 10.08% per annum. This interest rate would be applicable for the entire tenure of the FD scheme irrespective of any change in company FD Scheme for new investors.
2) These FD Schemes available for tenure of 1 year, 2 years, 3 years, 4 years and 5 years.
3) This FD Scheme available in 2 options i.e. Cumulative and Non-Cumulative Options.
4) This scheme has good credit rating from CRISIL and ICRA.
5) Minimum deposit is ₹ 5,000 and maximum deposit there is no limit.
5) Auto Renew Option is available where, after maturity, your FD would automatically gets renewed.
6) Auto refund facility is also available, where your money would be automatically credited to your bank account along with principal and interest on maturity.
7) Loan facility available upto maximum of 75% of the FD amount.
What are the Options available in this FD Scheme?
There are 2 options available viz. cumulative option and non-cumulative options.
1) Under Non-Cumulative Option, interest would be paid regularly monthly, quarterly, half yearly and yearly depending on the option chosen. Interest would be paid on the last date of the period. E.g. If you have chosen monthly, interest would be paid on 30th / 31st of the month.
2) Under Cumulative Option, Interest would be paid on the maturity only.
What are the minimum and maximum deposits in this FD Scheme?
1) Cumulative Option: Minimum deposit is ₹ 5,000 and in multiples of ₹ 1,000 there on. There is no limit on maximum deposit.
2) Non-Cumulative Option: Minimum deposit is ₹ 10,000 and in multiples of ₹ 1,000 there on. There is no limit on maximum deposit.
What are the interest rates of Shriram Transport Finance Fixed Deposit Scheme?
1) Interest Rates on normal FD Scheme
2) Interest Rates on FD Scheme for Senior Citizens
What are the credit ratings of Shriram Transport Finance FD Scheme?
This FD Scheme is rated by CRISIL and ICRA.
1) This FD scheme is rated as FAAA/Stable by Crisil indicating highest degree of safety.
2) This FD scheme is rated as MAA+/With Stable Outlook by ICRA indicating top credit quality.
Also Read: Best 5 Star Rated Mutual Funds to invest in India
What happens on Maturity of Shriram Transport Finance FD Scheme?
On maturity, company is providing 2 options:
1) Renew on maturity – You can choose auto renew option so that your FD scheme automatically gets renewed to same duration for which you opted originally (e.g. 1 year tenure FD would get automatically renewed for 1 more year)
2) Payment on Maturity – Under this option your investment along with interest would be credited to your bank account on maturity.
Is there any premature withdrawal option available in this FD Scheme?
Good part is that there is premature withdrawal option in this FD scheme. If you need money before maturity, you can cancel the FD and get your money back. However following terms and conditions apply.
1) Within 3 months from opening FD – No premature withdrawal allowed
2) 3 months to 6 months of opening FD – Premature withdrawal allowed, however, no interest would be paid
3) > 6 months from opening FD but before maturity date – Premature withdrawal allowed. One would get 2% lower than FD Interest if withdrawn before maturity.
Who can apply for this FD Scheme?
Following are eligible to apply for this FD Scheme.
1) Resident Indians
2) Companies / Corporates
3) HUFs
4) Partnership Firms
Who cannot apply?
NRI’s cannot apply for this FD scheme.
How to apply for this FD Scheme?
One can apply online on their website or with any other online portals like ICICIdirect to subscribe to this FD scheme. You can also apply offline by downloading the application form from their website here.
What are the documents required to invest in this FD Scheme?
One need to submit KYC documents when applying for this FD Scheme. KYC documents should include ID proof and address proof.
What is changed for this FD Scheme from last to current month?
This FD scheme is catching investor attention as interest rates are increased by company from Apr-2018. Recently SBI and several other banks also started increasing FD interest rates, hence companies are also following banks path now. Just see the comparison table.
How safe is Shriram Transport Finance FD scheme?
Shriram Transport Finance FD Scheme has good credit quality from CRISIL and ICRA, hence can be considered as low risk compared to other corporate FD Schemes.
Also Read: How to invest in Direct Plans of Mutual Funds in India?
Should you opt for Shriram Transport Finance FD Scheme offering 10% interest?
Stocks markets are volatile. Mutual Funds returns are to be lowered after long term capital gains tax is imposed. Debt funds cannot give more than 10% post tax returns. Under these conditions, one is looking for high quality corporate deposits. Shriram Transport Finance offers good interest rates. The tenure is also less than 5 years. If you want to park money for short term to medium term of say 3 to 5 years, you can opt for such high credit rated FD schemes. Senior Citizens who are willing to take risk (since these are corporate deposits, there is risk element), can opt for this FD scheme.
Readers, what is your view about this FD Scheme? Do you feel such good quality rated FD scheme is good for investment?
If you enjoyed this article, share it with your friends and colleagues through Face book and Twitter.
Suresh
Shriram Transport Finance FD Scheme Review
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I HAVE INVESTED IN SHRIRAM TRANSPORT FINANCE FD SCHEME IS MY MONEY SAFE FOR 3 YEARS.
IS IT SAFE TO INVEST IN SHRIRAMTRANSPORT FINANCE FD SCHEME FOR 3 YEARS.
I want to invest in fixed deposit . How to proceed ?
Yes absolutely it’s very safe .unlike bank where secured loans are less compare to other products.shriram does business in secured and easy dissolvable products.its rating is also very good .
Mahindra tractor finance
I AM RETIRED EXPECTING A MATURED AMOUNT WANT SECURED FD WITH SAFE AND BEST INTEREST WITH MONTHLY INCOME TO MEET MY EXPENSES.
I would avoid the issue considering the present turbulence in the NBFC sector,a decelerating economy,lack of any push in the recent budget to stimulate growth and investment and the over all pessimistic outlook for the economy which is gloomy.Further,the interest offered is rather high when over all the interest rate regime is trending to be lower.
Is the fd scheme open now
Yes, these are still available. You can review the latest update here. https://www.stfc.in/deposits.aspx
Hi Suresh sir,
My father has retired and one of his Bank FD has matured. After seeing this post, he wanted to put 20 Lakhs in non cumulative option here (his first time). We wanted to know:
1. Do the monthly payouts happen on time and are they consistent?
2. Is this Shriram transport a reliable enough name and not a ponzi scheme. Do they have a rank/rating from any of the rating agencies?
Thanks,
Joydeep
Dear Joydeep Sir,
Please invest money in Jeevan Akshay VI best pension plan with monthly payouts
Regards
Prathamesh Sontakke
so what is the difference between ncd and fd?
NCD – Non Convertible Debentures. These are most secured ones compared to FD.e.g. company gets wind-up (closure). NCD holders would be given preference in the repayment of capital or interest. Later FD holders would be given preference in repayment of capital and interest.
Thanks Suresh for the detailed view. You make investing so easy and worry free.
Thank you Philip
EXCELLANT
Thank you Sharad
Excellant explanation regarding FD scheme by STFC. This type of information builds confidence in investors regarding safety of their money.
Thank you.
I feel mahindra finance FD for senior citizens offers better rates. Kindly do a comparison of all corporate FDs showing their interest rates offered and their credit ratings.
Sure Balachandar. I would be providing some of the top company FD Schemes review next week.
Sir, in that pls consider the FD schemes offered by TN Transport finance corporation also… I think it gives higher interest rates compared with these schemes… Good part is its backed and guaranteed by TN Government
Hi Suresh,
If one opts for the cumulative option, when will TDS be deducted by the Company? Is it only on maturity ? Also, is there any form that we have to provide to the Company in case we declare that we are not coming into the tax bracket?
Hi Shankar, If you opt for demat form, no TDS would be deducted. If you are opting for paper FD, you can fill additional form not to deduct TDS in case you don’t have taxable income