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?
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 Rs 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 Rs 5,000 and in multiples of Rs 1,000 there on. There is no limit on maximum deposit.
2) Non-Cumulative Option: Minimum deposit is Rs 10,000 and in multiples of Rs 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.
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
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.
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?
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Shriram Transport Finance FD Scheme Review
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