13.73% 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)
Also Read: LIC Housing Finance FD Scheme offers up to 12% yield-Should you invest?
b) Interest rates of Cumulative Interest Payment Scheme (CIPS)
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
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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Tamil Nadu Power Finance Fixed Deposit Scheme
Thanks for your article on Tamilnadu Power Finance Corpn.
I am wondering how it performs well when its funds are used in Government Projects which are reporting marginal profit or loss. Same manner the Tamilnadu Transport Finance Corporation. Pl clarify how it reports good profit when its funds are used for Govt owned Units? are they allowed to independantly function in funding projects ?
Hello gopalan, You are referring old article. Pls read this article which is latest and has all pros and cons of investing in such schemes. https://myinvestmentideas.com/2020/05/tamil-nadu-power-finance-fixed-deposit-scheme-2020-should-you-invest/
So far I am getting the interest properly and I have not faced any issue.
My deposit period is getting expired in December 20 and I am planning to renew the same for a further period of 3 or 5 year period depending upon the Interest rate they declare