Mahindra Finance FDs offers Interest rate 8.75% and Yield up to 10%  – Should you invest?

Mahindra Finance Fixed Deposit Schemes Review


Couple of days back, Mahindra Finance announced an increase in the interest rates on their FD schemes. Mahindra Finance Limited FD Interest rates are now increased to 8.75% and its yield is up to 10%. Mahindra Finance FDs are rated by CRISIL as FAAA. With such high credit rating and high yield, it is attracting the investors now. What are the features of Mahindra Finance FD Scheme? What are various FD schemes available under Mahindra Finance? What are the interest rates offered by Mahindra Finance Fixed Deposit Schemes?  Who can invest in Mahindra Finance FD Schemes? Let me do Mahindra FD Scheme Review in this article. 

Also Read: 15 Top and Best Mutual Funds that offered over 30% annualised returns

What are the features of Mahindra Finance FD Scheme?


Here are the features of the FD Scheme.

Mahindra Finance offers 2 FD schemes viz. Dhanvruddhi FD Scheme and Samruddhi FD Scheme.

The deposits can be made under cumulative or non-cumulative options.

Under the cumulative option, the minimum amount of investment is Rs 5,000 and thereafter additional deposit accepted in the multiples of Rs. 1,000.

Under non-cumulative option, the minimum amount of investment is Rs 150,000 for monthly interest pay out, Rs 50,000 for a quarterly interest payout, Rs 25,000 for half year interest pay out and Rs 50,00 for yearly interest pay out.  

Deposits can be made for the duration of 1 year to 5 year period. However, it depends on the FD scheme chosen by the investor.

Under the cumulative option, the interest is compounded on an annual basis and paid on maturity. Under non-cumulative option, the interest amount is paid on a monthly /quarterly/half yearly and yearly basis depending on the option chosen. The Interest payout is directly credited to bank accounts, if ECS option is opted.

Deposits can be made by resident individuals, HUF, Private Limited Companies, Co-operative societies and Association of persons. Even NRIs can make deposits under this scheme with certain terms and conditions.

Deposits are accepted from individual as well as in joint names (not more than three)        .

Loan facility available for these FD Schemes to the tune of 75% of the FD amount. The interest rate would be 2% higher than the FD interest rate.

Mahindra Finance FD Application forms can be downloaded here.

What are the various FD Schemes offered by Mahindra Finance?


Mahindra Finance offers 2 different FD schemes and 2 variants in that. The interest rates of Mahindra Finance FD Schemes have been revised from 23rd August, 2018.

#1 – Mahindra Finance Dhanvruddhi Cumulative FD Scheme


1) The minimum deposit is Rs 5,000.

2) Tenure of the FD is for 15 months to 40 months.

3) Interest rates are from 8.25% to 8.75% per annum.

4) Effective Yield works out to be 8.39% to 9.71%.

5) Sr. Citizens would get 0.1% extra interest rates.

6) Here are the interest rates

Mahindra Finance Dhanvruddhi Cumulative FD Scheme-Interest Rates

#2 – Mahindra Finance Dhanvruddhi Non-Cumulative FD Scheme


1) The minimum deposit is Rs 50,000 for Yearly interest payout and Rs 150,000 for monthly interest payout.

2) Tenure of the FD is for 15 months to 40 months.

3) Interest rates are from 8.25% to 8.75% per annum for yearly payout option.

4) Interest rates are from 7.75% to 8.25% per annum for monthly payout option.

5) Sr. Citizens would get 0.1% extra interest rates.

6) Here are the interest rates

#3 – Mahindra Finance Samruddhi Cumulative FD Scheme


1) The minimum deposit is Rs 5,000.

2) Tenure of the FD is for 12 months to 60 months.

3) Interest rates are from 8% to 8.5% per annum.

4) Effective Yield works out to be 8% to 10.07%.

5) Sr. Citizens would get 0.25% extra interest rates.

6) Employee and their relatives of Mahindra Finance would get additional 0.35% interest rates.

7) Here are the interest rates

Mahindra Finance Samruddhi Cumulative FD Scheme-Interest Rates

#4 – Mahindra Finance Samruddhi Non-Cumulative FD Scheme


1) The minimum deposit is Rs 25,000 for a Half-Yearly interest payout and Rs 50,000 for a quarterly interest payout.

2) Tenure of the FD is for 12 months to 60 months.

3) Interest rates are from 7.85% to 8.35% per annum for half-yearly payout option.

4) Interest rates are from 7.8% to 8.3% per annum for quarterly payout option.

5) Sr. Citizens would get 0.25% extra interest rates.

6) Employee and their relatives of Mahindra Finance would get additional 0.35% interest rates.

7) Here are the interest rates

Mahindra Finance Samruddhi Non-Cumulative FD Scheme-Interest Rates

What is the credit rating of Mahindra Finance FD Scheme?


If you are thinking "is Mahindra Finance FD safe", you need to check its credit rating that can talk about its fundamentals. Mahindra Finance FD Schemes are rated by CRISIL as FAAA which indicates a high level of safety for interest payment and repayment of capital.

Can NRI invest in this scheme?


NRI’s can invest in this scheme on the Non Repatriation basis and with certain conditions. Acceptance of deposits can be made only by Indian Rupee through NRO account. NRI Deposits shall be accepted only through payments made from the depositors NRO A/c in India. Deposits with funds transferred From NRE or FCNR (B) A/c will not be accepted. NRI Deposits shall not be accepted by any inward remittance from overseas.

How to invest in Mahindra Finance FD Scheme online?


1) To invest, you may fill Mahindra Finance FD Form online, on their website.

2) Fill basic details like Name, mobile, email Id, amount etc.,

3) Upload basic KYC details (Aadhaar card, PAN Card etc.,)

4) Confirm details and select payment method

5) Make the deposit payment.

What documents required to open this FD Scheme?


Here are the documents required (any one of them) to be provided by Resident Indians. If you are non Resident Indians or Corporates, you may refer the company website for more information.

1) Aadhaar Card

2) Passport

3) The driving license

4) The Permanent Account Number (PAN) Card,

5) The Voter's Identity Card issued by the Election Commission of India,

6) The Job card issued by NREGA duly signed by an officer of the State Government,

How the interest is taxed in this Mahindra Finance FD Scheme?


The interest received on FD has to be added into the total income and taxed accordingly as per existing tax rates of the individual. However, Mahindra Finance would deduct income tax if interest payment is exceeding Rs 5,000 in a year.

Can we give Form 15H /15G to avoid or reduce income tax?


Form 15H or 15G are self-declaration forms required to be furnished by the assessee to Mahindra Finance for nil or lower deduction of TDS on interest of FD. Yes, form 15H or 15G can be submitted to avoid or reduce income tax.

Is premature withdrawal allowed in this FD Scheme?


Here the guidelines on premature withdrawal.

1) No premature withdrawal will be allowed before the completion of three months.

2) In case of request for premature withdrawal after the expiry of three months, but before 6 months from the date of the opening FD scheme, No Interest would be paid to investors.

3) In case of request for premature withdrawal after the expiry of 6 months, but before maturity, 2% lower interest rate would be paid compared to normal interest rates.

What is the Accident Coverage offered in this FD Scheme?


Mahindra Finance offers free insurance coverage on the FD Scheme. Here are the features.

1) Eligibility is that the individual should be 18 years to 70 years age.

2) Insurance coverage on the FD is Rs 1 Lakh

3) Insurance coverage is for Accident death only.

4) Tenure of the such FD scheme is 1 year.

Reasons to invest in Mahindra Finance FD Scheme


Here are some positive factors to invest in this FD scheme.

1) Mahindra Finance Fixed deposits offer a higher rate of interest compared to bank FDs. Mahindra Finance FD Rates 2018 are highest among corporate FD schemes. 

2) The scheme has been rated FAAA/Stable by CRISIL. This indicates the highest level of safety regarding interest payment and repayment of capital.

3) It offers 4 different variants in FDs where an investor can choose.

4) It offers an additional rate of interest to the senior citizens.

5) It offers an additional rate of Mahindra Group employees.

Drawbacks of investing in Mahindra Finance FD Scheme


1) Premature withdrawal rules attracts heavy penalty.  If you break your FD after 3 months, but within 6 months, you would get zero interest. If you break after 6 months, but before maturity, you would get 2% lower interest rates.

2) Investing in corporate FD schemes poses risk to the capital due to non-performance of the company in future.

Also Read: Tips to become Crorepati by investing Rs 1,200 per month in mutual funds

Should you invest in Mahindra Finance FD Scheme?


Mahindra FD schemes, offer high interest rates and good yield. These are highly rated corporate FD schemes. I keep indicating to investors that while higher interest rates are good, we should equally think about the safety of the capital too. Investors who are looking for fixed income can invest in such high rated FD schemes for short to medium term of 1 to 3 years. Investors who are looking an alternative income like pension income, can also invest, however, need to keep that in mind that these are high risk FD schemes. Don’t invest in them for long term as we would not know how the company is going to perform in the long run.

If you enjoyed this article, share it with your friends and colleagues through Facebook and Twitter.

Suresh

Mahindra Finance FD Scheme – Should you invest

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

5 Comments

Add a Comment
  1. Dear Mr. Suresh,
    Could you please let me know , which is the best low risk investment scheme that can fetch me an interest of min. 8%.
    Will appreciate your valued input.
    Thanks
    Suresh kumar

    1. Hello Suresh, if you are looking for low risk income option to get 8%, you can invest in Post Office Term Deposit or Post Office PPF. Some of the small finance banks are also providing higher interest rates at 8% + , however they come with risk. You can check this article about post office rates. https://myinvestmentideas.com/2019/01/latest-and-revised-post-office-small-saving-interest-rates-jan-to-mar-2019/

  2. Suresh Sir,
    Thanks for your mahindra finance FD details.
    I am looking for monthly income from FD interest for living and keep looking for various low risk investment which can fetch above 8% ..but I cannot take any risk due to various reasons.
    Kind request for a article on such topic please which gives details on different avenues.
    Thanks in advance

    Best Regards,
    Raj

  3. Which are the best tax free bonds to pick from the secondary mkt?

    1. Let me analysis and post as article next week.

Leave a Reply

Your email address will not be published. Required fields are marked *