Tamil Nadu Transport Development Finance Corporation (TDFC) FD Schemes - Features, Interest Rates, Safety, Risks and Review

10.46% Tamilnadu Transport Development Finance Corporation (TDFC) Fixed Deposit Schemes (2021)

Tamil Nadu Transport Development Finance Corporation (TDFC) FD Schemes - Features, Interest Rates, Safety, Risks and ReviewTamilnadu Transport Development Finance Corporation (TDFC) Fixed Deposit Schemes – Features, Interest Rates and Review

Interest rates are falling year on year. If you are looking for a safe investment option with good interest rates, Tamil Nādu Transport Development Finance Corporation (TDFC) FD scheme could be a safe bet for you. TDFC offers higher interest rates up to 8.77% and one can can get yield up to 10.46%. These FDs are considered as safe since the entity is wholly owned by Government of Tamilnadu. In this article, we would provide Tamil Nadu Transport Development Finance Corporation (TDFC) FD Scheme details , Interest rates in 2021, negative factors and do 360 degree review.

Also Read: TNPFC FDs offer 10.46% Yield – Should you invest?

About TDFC Limited

TDFC Limited is the wholly owned by Government of Tamilnadu. Company is registered with RBI as a Non-Banking Finance Company (NBFC) vide Regn. No.07.00403. It is classified as a Hire Purchase Finance Company.

It mobilizes funds through various fixed deposit schemes. It provides financial assistance to state transport undertakings in Tamilnadu. Company is consistently making profit since its inception (1975). Fixed Deposit Schemes are as per RBI Guidelines and Total Deposits as on 31-Mar-2020 is Rs.5996 Crores. Total Number of Deposits as on 31-Mar-2020 is 1,48,815 (2021 data is not yet available).

Tamilnadu Transport Development Finance Corporation FD Scheme Details in 2021

TDFC FD schemes are offered for 1 year to 5 years tenure.

These FD schemes are offered in two options, periodic interest payment scheme (non-cumulative option) and money multiplier scheme (cumulative option).

In money multiplier scheme, the interest would be paid on maturity.

In periodic interest payment scheme, interest would be paid monthly or quarterly or annually based on the option chosen.

Minimum deposit is Rs 50,000 and in multiples of Rs 1,000 there-of.

TDFC Interest rates are ranging between 7.25% to 8.24% for general category.

Senior Citizens would get up to 0.52% higher interest rates depending on the FD option.

What are various FD Schemes offered by Tamilnadu Transport Development Finance Corporation?

It offers two options – Scheme-I and Scheme-II.

1) Scheme-I – Periodic Interest Payment Scheme (Non cumulative)

This is non-cumulative fixed deposit where the interest would be paid monthly, quarterly or annually. On the maturity, you would get principal amount back. These FDs are available for 1 year, 2 years, 3 years, 4 years and 5 years tenure. It offers interest rates in the range of 7.25% to 8.24% depending on the tenure. Senior Citizens would get up to 0.52% extra interest rate on specific tenures i.e., up to 8.77% interest rates.

2) Scheme-II – Monthly Multiplier Scheme (Cumulative)

The interest in this scheme would be compounded and paid on maturity. These FDs are available for 1 year, 2 years, 3 years, 4 years and 5 years tenure. The interest rates are ranging between 7% to 8%, depending on the tenure of the FD. Senior Citizens would get up to 0.5% extra interest rates on specific tenure FDs i.e., up to 8.5% interest rates.

What are TNFC FD interest rates in 2021?

Here are the details of interest rates for general category. Senior Citizens would get up to 0.52% extra interest rates on specific tenures

1) TNFC FD Interest Rates – Scheme-I (non-cumulative) – Regular category and Senior Citizens

TDFC - Interest Rates - Scheme-I - 2021 - Regular and Senior Citizens-Periodic Interest Payment Scheme

2) TNFC FD Interest Rates – Scheme-II (cumulative) – Regular category and Senior Citizens

TDFC - Interest Rates - Scheme-II - 2021 - Regular and Senior Citizens - Money Multiplier Scheme-Cuulative

Who is eligible to open a Tamilnadu Transport Development Finance Corporation Fixed Deposit?

The following are eligible to open this FD scheme.

1) Resident Individuals

2) Hindu Undivided Family (HUF)

3) Partnership Firms

4) Trusts

5) Private Limited companies

6) Public Limited companies

7) Government company

8) Boards

9) Local authorities

10) Societies

11) Universities

12) Temples

There is no clarity on TNFC Website whether NRI’s are eligible to open this FD scheme or not.

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How to Open or apply for Tamilnadu Transport Development Finance Corporation Fixed Deposit Online and offline?

All the fixed deposits these days can be opened online. But the process in government organizations FD schemes are manually done. Same with Tamilnadu Transport Development Finance Corporation FD Scheme where there is no online facility. You can follow below process to apply for TNFC FD scheme in offline process.

1) Download the TDFC FD Application form, fill the form and sign.

2) Enclose below copy of documents to the application form.

PAN Card

Aadhaar Card / address proof

Signed KYC Form (photo signed across)

Signed Form 15 G / 15 H (if applicable)

Cancelled cheque. If this is not available, bank pass book copy where IFSC code is visible.

Cheque or DD only. No direct bank remittance allowed.

3) In case of renewal of FD scheme, renewal application form, copy of PAN card, original FD receipt (signed back side) need to be attached.

4) Send these documents to TNFC deposit mobilization scheme address indicated below:

Tamilnadu Transport Development Finance Corporation Limited

Deposit mobilization Centre

SETC Bus Stand Complex

Gandhi Puram

Coimbatore – 641 044

Ph: 0422 2527102

Why to invest in this TDFC FD scheme?

Here are some positive factors.

1) Tamilnadu Transport Development Finance Corporation (TDFC) 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 50,000 and get higher interest rates up to 8% for regular investors and up to 8.77% for Senior Citizens and get high yield up to 10.46%.

3) It provides Periodic interest payment scheme where investors can get regular income either monthly, quarterly or yearly.

Why NOT to invest in Tamilnadu Transport Development Finance Corporation FD?

Here are some negative points.

1) Premature withdrawal rules make it unattractive.

2) The FD opening and closures process is completely manual. It cannot happen on same hour the way it happens in banks. You could see delay in the entire process of opening, processing, or closures.

3) One need to physically visit TDFC branch and submit the documents. Due to covid they were accepting documents through post, but not sure how the rules would be going forward.

Some of the FAQs about TDFC Fixed Deposits

1) What is TN Development Finance Corporation FD Rating?

Are you thinking whether “is it safe to invest in Tamilnadu Transport Development Finance Corporation FD”? TDFC FDs are rated as MA- (Stable) by ICRA in November 2020.

One should note that due to pathetic bank facilities, ICRA rated them as BBB- for this category.

2) How is FD Interest taxed?

Tamilnadu Transport Development Finance Corporation 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 during the financial year.

3) Can I take a premature withdrawal from TDFC FD?

One can take a premature withdrawal only after 3 months from the date of 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 will get 2% 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 maturity, you will get 1% lower rate compared to the interest rate offered for the FD.

You need to give 7 days’ advance intimation for FD premature withdrawal.

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

Yes. FD investors can submit form 15G or 15H to avoid TDS deduction on their FD interest.

5) 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.

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

TDFC has given the list of members who can apply these FD schemes and NRI’s name is missing, hence we are assuming that NRIs cannot invest in these schemes.

7) Would existing customers of TDFC get any extra interest?

No. They would not get any extra FD interest.

8) What are TDFC toll free number or customer care details?

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

i) Reach them on their registered address

Tamilnadu Transport Development Finance Corporation Limited

Tamilnadu Tourism Complex

4th Floor, No 2,

Wallajah Road

Chennai – 600 002.

ii) You can write to them at their registered office mail ID: tdfc.chennai@gmail.com

iii) You can reach at below contact nos.

Registered office contact no’s: 93848 53026; 93848 53029; 73388 17898.

Deposit manager at 89393 16574

iv) Grievance Redressal Officer: Mr. Thiru J Kannan – Ph: 044-2533 3930 or mobile: 73388 17895

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TDFC FD Scheme Review – Should you invest or avoid?

Tamilnadu Transport Development Finance Corporation is wholly 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 10.46%. However, it is nowhere mentioned on their website / application form that these FDs are guaranteed by TN Govt (while the entity is owned by TN Govt). The entire process of FD opening, and closure is completely manual. One should also consider some of the negative factors including premature withdrawal guidelines + slow processing of transactions etc. indicated above. Beyond this, it is a good and safe FD scheme to invest.

Have you liked our tips and analysis? Then share it on your Facebook, Twitter, Telegram and other social media which might be useful to your friends too.

Suresh KP

22 thoughts on “10.46% Tamilnadu Transport Development Finance Corporation (TDFC) Fixed Deposit Schemes (2021)”

  1. Dear Suresh,

    Firstly thanks for writing this review. I also have a question.

    In the Non Cumulative Category , under Monthly section which would be the better option among the 3 ?

    1) 7.75 for 3 years

    2) 7.75 for 4 years

    3) 8 for 5 years

    In my limited understanding, 7.75 for 3 would be better if after 3 years, the interest rates pick up and we can hitch our bandwagon to a more lucrative option. On the other hand, if the interest rates continue to nosedive, we would atleast be getting 8 percent for 2 more years. I wish you would give your expert opinion.

    Manoj

    1. Which option depends on the features of the option and your need. If you don’t need money in next 5 years, opt for long tenure FD. In coming years, interest rates are expected to fall, hence locking FD at higher returns now would always better.

      1. Suresh Sir,
        According to some experts (on internet websites), the interest rates have already reached an all time low and it can only go higher from here. Your view is contradicting this. Could you elaborate on this topic.

        1. Just see the historical interest rates. It is always on downward trend. In many countries, the interest rate are either low or even negative (means you need to pay amount to keep your money in bank). India might move towards that. In short term, you might not see any down trend, but look for medium to long term.

  2. Am interested in investing in Taminadu Transport Development FD scheme,as am residing in Mumbai ( Marashtra ),how can I get the application form,and where to submit in Mumbai ?

  3. Why do we need to physically visit the centre (imagine people from North!), When the postal address is available?

    Robin

    1. Thats the process defined by them Robin. I heard due to covid they are accepting through courier / post. If this is true, not sure how long they would continue it.

  4. After paying interest at higher rate, can they continue to be in business? Instead of paying public higher rate, why they can’t take loan from banks or other foreign institutions at much lower? Is it because they already have exceeded the loans that can be taken by pledging their assets and this is the only way to raise funds?
    When there is no guarantee from government of tamil nadu, what will happen if there is a business failure? Is there a business plan which will allow them to make more 11% return?

  5. Two things :
    1. Their customer care center is at Chennai whereas Deposit mobilization center address is of Coimbatore. I do not why there are two different addresses. This creates duplicity of works at their end, creates confusion and there may be some delay/bureaucracy led delay at their end since there are two different offices for same activity.
    2. All other things remain the same as of TN Power Finance except that the process at TN Transport Corp. is physical (one has to send the papers physically and in case of any deficiency, the process could further delay) whereas in case of TN Power, the entire end-to-end process is completely online/digital and every process is online including submission of Form 15-G/H, etc. In fact, during the last one year or so, TN Power has improved their IT infrastructure tremendously and now there are no glitches in their working.
    I wonder why TN Transport Corpn should not learn this thing from TN Power (both being same State Govt entities offering same rate of interest and other things).

    1. One is their corporate/registered office and another is only for deposit mobilization. I agree it creates confusion with customers. TNPFC is more matured in terms of online process and entire FD process. One hand of TN Govt need to learn from another hand who already digitised the FD process

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