10.9% Tamil Nadu Power Finance Fixed Deposit Scheme 2020 – Should you invest?

Tamil Nadu Power Finance Fixed Deposit Scheme - Features, Issue details and Interest RatesTamil Nadu Power Finance (TNPFC) Fixed Deposit Scheme 2020 Review


Banks have been reducing FD Rates in the last few quarters. If you are looking for a safe investment option with higher interest rates, Tamil Nadu Power Finance FD scheme could be a best bet for you. Tamilnadu Power Finance and Infrastructure Development Corporation (TNPFC) offers higher interest rates up to 8.75% and one can can get yield up to 10.9%. These FD’s are considered as safe as the entity is owned by Government of Tamilnadu. In this article, we would provide Tamilnadu Power Finance FD Scheme details of 2020, Interest rates and also indicate any negative factors in this Fixed Deposit Scheme.

Also Read: KTDFC Fixed Deposits offer 9.8% Yield – Is it safe to invest?

About Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (TNPFC)


TNPFC is wholly owned by the government of Tamilnadu. Registered with RBI as a Non Banking Finance Company vide Regn no. 7.00389 Classified as a Hire Purchase Finance Company. It mobilizes funds through various Deposit Schemes. It provides Financial Assistance to Power and Infrastructure Projects and provides funds to Tamil Nadu Generation and Distribution Corporation Ltd. The Corporation has been making a profit since its inception. It declared dividend @ 30% on Profit After Tax for the Financial year 2017- 2018. Their deposit schemes are as per RBI Guidelines. One should note that these FDs are not specifically indicated as guaranteed by TN Government anywhere in the website or in the application form.

Tamil Nadu Power Finance Fixed Deposit Scheme Details in 2020


1) Tamil Nadu Power Finance FD’s comes with 1 year to 5 years tenure.

2) This FD scheme, offer cumulative and non cumulative options. In cumulative option, the interest would be paid on maturity. In non cumulative option, interest would be paid monthly or quarterly or annually based on the option chosen.

3) You can deposit a minimum of Rs 25,000 and in multiples of Rs 1,000 in this FD scheme.

4) TN Power Finance Interest rates are ranging between 7.5% to 9.11% for general category.

5) Senior Citizens would get 0.5% higher interest rates. The yield works out to be up to 10.93% for a 5 year cumulative FD Scheme.

6) These interest rates are effective from 22nd January, 2019 onwards and valid in 2020 too.

Also Read: Best Short Term Mutual Funds to invest in India

What are Tamil Nadu Power Finance FD Schemes available?


It offers two FD options:

1) Regular Interest payment Scheme (RIPS):  This is non-cumulative fixed deposit where the interest would be paid monthly, quarterly or annually. On the maturity, you would get your investment back. These FDs are available for 3 years, 4 years and 5 year tenure. Interest Rates are ranging between 8.25% to 8.57%, depending on the tenure. Senior Citizens would get 0.5% extra interest rate.

2) Cumulative Interest Payment Scheme (CIPS): This is a cumulative FD scheme where the interest would be compounded and paid on maturity. The tenure of these FDs is for 1, 2, 3, 4 and 5 years. Interest rates are in the range of 7.5% to 8.25%, depending on the tenure of the FD selected. Senior Citizens would get 0.5% extra interest rates.

What are Tamil Nadu Power Finance FD interest rates in 2020?


Here are the details of interest rates for general category. Senior Citizens would get 0.5% extra interest rates. Refer to the respective columns.

A) Interest rates on Regular Interest Payment Scheme (RIPS)


If you are thinking how much interest you would get if you invest Rs 1 Lakh in cumulative / RIPS FD scheme, here is the calculator.

Tamil Nadu Power Finance Corporation FD Scheme - How much interest you get for 1 lakh in RIPS scheme

B) Interest rates on Cumulative Interest Payment Scheme (CIPS)


Tamil Nadu Power Finance FD Interest Rates 2020 - Cumulative (CIPS) Scheme

Who is eligible to open a Tamil Nadu Power Finance Fixed Deposit?


The following are eligible to open this FD

1) Resident Individuals

2) Hindu Undivided Family (HUF)

3) Trust

4) Government firm

5) Private Firms

6) Societies

7) NRI’s are also eligible to open this FD scheme with certain terms and conditions.

How to Open or apply in Tamil Nadu Power Finance Fixed Deposit Online?


Generally, all the fixed deposits these days can be opened online. But government organizations FD scheme are almost manual. However, Tamil Nadu Power Finance FD Scheme online facility is very much available. You can visit this link to see how to deposit in Tamilnadu power finance.

You can also open TNPFC FD Offline by submitting documents to nearest centers. Please check the website for more info about this.

What documents are required to open Tamil Nadu Power Finance Fixed Deposit Scheme?


You need to submit an Aadhaar Card to open TNPFC FD.

In case depositor chooses to have a different address other than the address indicated in the other, any of the below documents needs to be submitted as Proof of Address:

Passport

Voter ID

Driving license

Ration card

Telephone bill (not older than three months)

Bank Account Statement of a Scheduled bank

Electricity bill (not older than three months)

Water bill (not older than three months)

In case the address mentioned in the above documents differs from the present address, copy of any one of the following document should be furnished for proof of residential address.

Telephone Bill / Bank Account Statement / Letter from any recognized public authority / Electricity Card / Letter from Employer. · In the absence of the above documents, the company will not be able to process the application for deposit / renewal.

Why to invest in this TNPFC FD scheme?


Here are some positive factors.

1) Tamil Nadu Power Finance and Infrastructure Corporation (TNPFC) is a Tamilnadu Government owned entity and safe to invest in their FDs. One should note that there is no info about TN Govt guaranteeing these FDs on either their website or in application form.

2) You can invest in this FD scheme with a minimum of Rs 25,000 and get higher interest rates up to 8.57% for regular investors and up to 9.11% for Senior Citizens and get high yield up to 10.93%.

3) You can enjoy FD options of cumulative FD, monthly interest FD or Quarterly FD or yearly interest FD.

Why NOT to invest in Tamilnadu Power Finance Corporation FD?


Here are some negative points.

1) Premature withdrawal rules make it unattractive.

2) The FD opening and closures would same some time in Government own entities. It cannot happen on same hour the way it happens in banks. You could see delay in the entire process of opening or processing or closures

Some of the FAQs about TNPFC Fixed Deposits


1) How Tamil Nadu Power Finance FD Calculator work?

You can visit Tamilnadu Power Finance Interest FD calculator where you would know the interest rate and maturity amounts before you invest. This way you know what is your FD maturity amount after a specific period of tenure. You can plan it appropriately.

a) Regular Interest Payment Scheme FD calculator

b) Cumulative Interest Payment Scheme FD calculator

2) What is TN Power Finance Corporation FD Rating?

Are you thinking whether “is it safe to invest in Tamil Nadu Power Finance FD”?. ICRA has rated these FDs as “MA-Stable”.  The rating is valid up to August 18, 2020. Since it is owned by TN Government, one can consider this as safe FD though it has not explicitly indicated anywhere in the application form or on their website.

3) How is the Interest paid on FDs are taxed?

Tamil Nadu Power Finance Corp would deduct TDS on interest exceeding Rs 5,000 per annum like any other company. However, one need to calculate total interest received and pay income tax based on the income tax slab applicable to them in that year.

4) Can I take a premature withdrawal in this TNPFC FD?

One can take a premature withdrawal only after 3 months from the date of Tamil Nadu Power Finance Corporation FD. Here are the premature guidelines of this FD scheme.

a) If you wish to break the FD between 3 to 6 months after opening FD, no interest would be paid.

b) If you wish to break FD after 6 months of opening FD but before 12 months, you would get 3% lower rate compared to the interest rate offered for 12 months tenure FD.

c) If you wish to break FD after 12 months of opening FD but before 24 months, you would get 2% lower rate compared to the interest rate offered for 24 months tenure FD.

d) If you wish to break FD after 24 months of opening FD but before 36 months, you would get 2% lower rate compared to the interest rate offered for 36 months tenure FD.

e) If you wish to break FD after 36 months of opening FD but before 48 months, you would get 2% lower rate compared to the interest rate offered for 48 months tenure FD.

You need to give 15 days advance intimation for FD premature withdrawal.

5) When interest is paid for Regular Interest Payment Scheme (RIPS)?

In case of non cumulative deposits / RIPS, interest would be paid on the last day of the month or quarter or year.

6) Can we submit Form-15G or Form-15H?

Yes. Individuals can submit a form 15G or 15H to Tamil Nadu Power Finance to not to deduct TDS on their FD interest.

7) In an emergency, can I get a loan against my FD?

Yes, but after 3 months from the date of opening FD which would be at the discretion of the company. One can request for the loan on this FD which would be up to 75% of the FD amount. The interest rate would be 1% higher than the FD interest rate on such loan. One can avail such loan only for twice during the FD tenure.

8) Can NRI’s invest in this FD Scheme?

Yes. Here are the guidelines for NRI to invest in the TNPFC FD scheme.

a) Deposits from NRIs are accepted as defined in the Income Tax Act, 1961 (as amended).

b) NRIs should remit from their Non-Resident Ordinary maintained with banks on non repatriation basis provided that the amount deposited with the company does not represent inward remittances of transfer from NRE/FCNR (B) accounts into the NRO account.

c) NRI Deposits are accepted subject to the specific understanding that the maturity Value of deposit and the interest thereon will not be repatriated outside India.

d) NRI Deposits are accepted for a maximum period of 36 months.

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9) If I am an existing customer of Tamil Nadu Power Finance, would I get any extra interest?

No. They would not get any extra FD interest.

10) What are the Tamil Nadu Power Finance Fixed Deposit toll free number or customer care details?

You can reach at any of the following details for queries or complaints.

i) You can write to them at their registered office mail ID: power@tnpowerfinance.com

ii) You can reach them at their registered office contact nos Ph: 044 2432 9945 / 044 2432 9946 and whatsapp to 044 24329950.

Should you invest in Tamil Nadu Power Finance Fixed Deposit Schemes in 2020?


Tamil Nadu Power Finance is 100% owned by the Tamilnadu Government. Its FDs are safe as the entity is owned by TN Government. It offers highest interest rates where yield comes up to 10.9%. Even TN Power Finance FD can be opened online which is easier than the manual process. One aspect is that it is no where mentioned on their website / application form that these FDs are guaranteed by TN Govt (while the entity is owned by TN Govt).  One should consider some of the negative factors like premature withdrawal guidelines + slow processing of transactions etc. indicated above. Beyond this, it is a good and safe FD scheme to invest.

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Suresh KP

Tamil Nadu Power Finance Fixed Deposit Scheme 2020 Review

Suresh KP

67 comments

  • Ram

    Sir @Suresh K P,
    I have read the terms and conditions of this FD entirely but no where it is promised that the deposits are guaranteed by the state government.

    Also, it is mentioned that the deposits are not insured.
    But you have said that since it is a wholly owned govt entity guarantee is there. Can someone who can clarify this doubt pls answer?

    • Hello Ram, It is no where indicated in the website / application form that such FD’s are guaranteed by TN Govt (like it is specifically indicated in KTDFC FDs). TNPFC is wholly owned entity of TN Govt, hence it is indicated as safe FD. Like you many FD investors would get this doubt, hence I have specifically mentioned this now in the article itself as many of you might not go thru the comments.

  • Aakash Patwa

    Hi ! I invested good amount in this TNPFC and I would say that the process is a bit slow, even on some fd’s I made, it took 3-4 days to confirm the amount received and then it generates a fd.
    But in the generated fd, in which bank account will it credit interest is not mentioned although I had provided the details during generating the fd. If anyone have any clue on how to confirm that in which account will it credit interest, do tell.

  • sailesh

    Can we get a tax exemption under 80C for the FD like we get for FD from any other bank with minimum lock in period?