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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Tamil Nadu Power Finance Fixed Deposit Scheme

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I have done by B.Com from Osmania University and then MBA-Finance from Symbiosis University, Pune. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPOs, reviewing Insurance Products, analysing Health insurance Plans etc.


Add a Comment
  1. dear suresh,

    Thank you for the article. What is the difference between CIPS 1 and CIPS 2 for 60 months period?

    1. Dr. Sudhakar, they a seperate objective e.g. CIPS-1 can be invested for min of Rs 10,000 and any amount higher than that. However CIPS-2 can be invested in multiples of Rs 608 only which would fetch you Rs 1,000 in 6 months. e.g. Rs 608 would give you Rs 1,000 and Rs 1,216 would give you Rs 2,000 at maturity etc. This is one of the best way to plan.

  2. Dear Sir,

    Please inform me how to take printouts of your Essays appearing in the website.

    There is no print option at the end of your essarys.


    S. Ravi chandiran,



    1. Hi Ravi, I have not inputted print option as of now. You can use Control+P and print it. I would work out on how you can take a better print out by incorporating a button on the article itself.

  3. Looks like someone has deleted my post. Please let me know for 60 months cumulative option, even though the rate of interest is higher in this FD, i am getting less maturity amount compare to shiram city finance FD.. Can you let me know how the maturity amount is calculated

    1. Manish, I keep answering based on some order (easiest to tough ones). I just responded to your other query. Pls bear and give me time between 24 to 48 hours to respond.

  4. Incase if I am investing in 5 year FD, Can I show this Under 80C as investment for Tax excemption?

    1. Hi Pillai, No. These are not tax saving schemes.

      1. Thank you Suresh 🙂

  5. Hi Suresh,

    I have a question on the maturity amount. Under the cumulative interest payment for others, if I invest 10000 for 60 months, I will get Rs 16453 with a effective yield of 12.91. But if I invest same amount in shriram city union finance secured ncd april 2014, for the same duration, I am getting 17430 on maturity with a percentage of 11.75. So wanted to know despite having higher return percentage, why TN power is giving less amount on maturity.

    1. I have not noticed this Manish. I investigated for some time and gave up. These two data is from company websites only. You need to give some time for me to investigate and check in case there is any error in the tables provided by them.

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