Bajaj Finserv reduces fixed deposit rates by 25 basis points

Company fixed deposits popular with retirees and other investors are seeing their interest rates coming down. The latest company in the AAA rated space to lower deposit rates is Bajaj Finserv. The company has lowered its deposit rates by 25 basis points from June 1. It will now pay 8.55% for a 12-17 month fixed deposit and 8.65% for a 18-60 month fixed deposit tenure.

"Even with this drop in rates, these deposits pay about 100-125 basis points higher than banks," says Anup Bhaiya, MD and CEO, Money Honey Financial Services.
A fixed deposit with State Bank of India or a private sector bank like HDFC Bank fetches a maximum of 7.5%.

Financial planners suggest investors can look at Post office Senior Citizens Scheme (SCSS) where interest rates are still 8.6%. Once that limit is exhausted they can also consider debt funds. Alternatively they can keep an eye for non convertible debentures which hit the primary markets. For example in May, Mahindra Finance NCDs offered investors 9% for a period of 10 years.