10.07% Shriram Transport Finance Fixed Deposits 2020 – Should you invest?
Shriram Transport Finance Fixed Deposits 2020 Review
Bank FD rates have fallen drastically in the last 3-6 months. Many investors are looking for safe fixed income options. While there are several company FD schemes, they are high risk. One of the way to safeguard to some extent is to invest in AAA rated company FD schemes. Shriram Transport Finance offers FD schemes where interest rates are upto 8.5% and yield works out to 10.07%. What are the features of Shriram Transport Finance FD Scheme in 2020? Is Shriram Transport Finance FD Safe post covid-19 crisis? Should you invest in Shriram Transport Finance Fixed Deposits or avoid? This post is based on a request from Muneeswaran to review this FD now in 2020.
About Shriram Transport Finance Limited
Shriram Transport Finance Company Limited (STFC) is an asset financing non-banking finance company. The Company is engaged in providing finance for commercial vehicles and other loans. The Company operates through financing segment. The Company operates through a network of approximately 850 branches. This is part of Shriram Group, founded by R Thyagarajan.
Features of Shriram Transport Finance Fixed Deposits (STFC FD)
Here are the key features of this FD scheme.
1) Shriram Transport Finance FD comes with 12 months to 60 months tenure.
2) It offers cumulative and non cumulative options. In cumulative plan, the interest would be paid on maturity. In non cumulative plan, interest would be paid monthly, quarterly, half-yearly and yearly depending on the option chosen by the investor.
3) You can deposit a minimum of Rs 5,000 and in multiples of Rs 1,000 thereon in this fixed deposit scheme.
4) Interest rates are ranging between 7.35% to 8.5% for general category. These are revised from 1 May, 2020.
5) Senior Citizens (60 years and above) would get 0.25% higher interest rates. Means they would get up to 8.75% interest rates.
6) Shriram Transport Finance Limited employees and their relatives would get 0.15% higher interest rates compared to regular individuals.
7) One of the best feature is that you can open Shriram Transport Finance FD Online and renew them online. If you renew, you would get 0.25% higher interest rates compared to existing rates.
STFC FD Interest Rates in 2020
It offers 12 months to 60 months tenure FDs where one would get interest up to 8.5%. Here are the details of interest rates of this FD scheme for general category. Shriram Transport Finance FD rates in 2020 for Senior Citizens would be 0.25% extra compared to others and Shriram Transport Finance employees and their relatives would get 0.15% extra. Here are the latest interest rates offered by them.
a) Cumulative Interest Rates of Shriram Transport Finance FDs
b) Non-cumulative Interest Rates of Shriram Transport Finance FDs
Who is eligible to open a Shriram Finance FD?
The following are eligible to open this FD scheme.
1) Resident Indians
3) Partnership Firms
4) Hindu Undivided Family (HUF)
5) Unincorporated Association or Body of Individuals
6) Trust & Foundation
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How to Open Shriram Transport Finance Fixed Deposit Online?
You can login at this link and open fixed deposit. If you do not have the login and password, you need to first register at same link.
How to Open Shriram Transport Finance Fixed Deposit Offline?
You can also open FD manually by submitting application form + relevant Id proofs. You can visit their office or nearest STFC branch for this.
Documents required to open Shriram Transport Finance FD Scheme
You need to provide any of the following ID proofs.
b) PAN Card
c) Driving License
d) Voter Id
e) Job Card by NREGA
f) Aadhaar Card
You need to provide any of the following Address proofs.
b) Driving License
c) Voter Id
d) Job Card by NREGA
e) Aadhaar Card
f) Pension Payment order
g) Property/Municipal Tax Receipt
h) Bank Pass book/Bank Statement
i) Accommodation Letter from Employer
j) Documents by Foreign Authorities
k) Latest Utility Bill of any service provider (electricity, telephone, postpaid mobile phone, piped gas, water bill).
Why to invest in this FD scheme?
Here are some positive factors about this FD scheme.
1) Shriram Transport Finance is part of Shriram Group, which is a trusted brand in India.
2) You can get higher interest rates up to 8.5% for regular investors and 0.25% extra for Senior Citizens. You can get yield up to 10.07% + 0.25% extra for Senior Citizens.
3) You can invest in this FD scheme with a minimum of Rs 5,000 and in multiples of Rs 1,000 thereof.
4) Shriram Transport FD has a highest credit rating of “FAAA/Stable” by CRISIL that indicates a high degree of safety. These are also rated as “MAA+/with stable outlook” by ICRA, which indicates the high credit quality of the investment.
5) You can open this FD online and renew it online. This would make your life easier.
Why NOT to invest in this FD scheme?
Here are some negative points or risk factors.
1) NBFC sector is yet to come out of the current crisis and your investment could high risk.
2) Corporate FDs does not offer any security. In case of company gets windup for some reason, FD investors would get preference like any other creditors and repayment would happen in normal process. There would not be any preference given to FD investors.
3) STFC Premature withdrawal rules make their FD unattractive.
FAQs about this FD Scheme
Here are some of the FAQs about this FD scheme.
1) How can I calculate the interest amount?
You can visit Shriram Transport Finance FD calculator link which can help you to know the interest amount. Based on the option and tenure chosen, the interest amount would differ.
2) What is Shriram Transport Finance FD Credit Rating?
You might be wondering “is Shriram Transport Finance FD safe”. You need to check the FD credit rating that can talk about its fundamentals. Crisil has rated these fixed deposits as “FAAA/Stable” that indicates a high degree of safety. ICRA rates this FD as “MAA+/Stable Outlook”, which indicates high credit quality of FD scheme. One should note that such credit ratings can change any time without notice.
3) How the Interest received on these STFC FDs are taxed?
Shriram Transport Finance would deduct TDS on interest exceeding Rs 5,000 per annum. However, one need to calculate total interest received during the financial year and pay tax based on the income tax slab applicable to them in that year.
4) Can fixed deposit be made in the name of Minor?
Yes. You can make a deposit in the name of any minor, provided such minor is represented by his natural or legal guardian and the Application Form for the deposit is signed by the natural/Legal Guardian, on behalf of the minor. All communication in relation to the deposit shall be addressed to the guardian.
5) Can I make deposits in joint name along with my spouse?
Yes. You can make a fixed deposit in the joint name along with your spouse.
6) Is premature withdrawal allowed for this FD?
Yes, you can do Shriram Transport Finance FD premature withdrawal, however there are certain conditions for premature withdrawal
i) One can do premature withdrawal of FD only after 3 months from the date of deposit or from the renewal of deposit.
ii) If you wish to break the FD between 3 to 6 months after opening FD, no interest would be paid to you.
iii) If you wish to break FD after 6 months of opening FD but before the maturity date, you would get 2% lower interest rate.
7) On what date the interest is paid for non cumulative deposits?
In case of non cumulative deposits, interest would be paid on the last day of the month or quarter or half year or year based on the scheme and option chosen.
8) Where can I get Shriram Transport Finance FD Application Form?
You need to login to customer portal to check the FD application form.
9) Can we submit Form-15G or Form-15H?
Yes. Individuals can submit a form 15G or 15H to the company to not to deduct TDS on their FD interest.
10) In an emergency, can I get a loan against my FD?
Yes. You can get loan on this FD scheme with terms and conditions. You can get loan after 3 months from the date of opening FD. One can request for the loan on this FD which would be up to 75% of the fixed deposit amount. The interest rate on such loan would be 2% higher than the FD interest rate.
11) Can NRI’s invest in this FD Scheme?
No. NRI’s cannot invest in this Fixed Deposit.
12) If I am an existing customer, would I get extra interest?
No. They would not get any extra FD interest. If you are existing FD investor, you can get extra interest only during renewal of FD which is 0.25% extra.
13) What are the Shriram Transport Finance FD customer care details?
You can reach at any of the following details for queries or complaints.
i) You can fill the form and they would call you back. https://www.stfc.in/contact-us/
ii) FD investors can reach them at : +91 22 41574545
iii) One can also reach at their toll free number 1800 103 4959
Should you invest in Shriram Transport Finance FD Scheme in 2020?
Shriram Transport Finance is part of the Shriram Group, which is a trusted brand in India. Its FDs have high credit rating from Crisil and ICRA. It offers highest interest rates upto 8.5% and yield upto 10.07%. If you are senior citizen, you can get 0.25% extra interest too. However, on other side, company FD schemes are high risk. These FDs does not offer any security the way Secured NCDs offer to some extent. If you are a high risk investor and willing to consider all these risks, you can invest in this FD Scheme. If you are a low or moderate risk investor, stay away from such FD schemes.
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Shriram Transport Finance Fixed Deposits 2020