123 personal finance

Additional 0.25% for existing HDFC Home Loan Customers.

HDFC Home loan customers can now avail of additional 0.25% on fixed deposit rates for a limited period.

Period Annually Half Yearly Quarterly Monthly

15,20&30 11.15% 10.90% 10.75% 10.70%
Months


45Months 10.55% 10.30% 10.15% 10.10%

Additional 0.10% is also provided on deposits above Rs 10 lacs.

HDFC LTD fixed deposit interest rates for various tenors and duration:

FIXED RATE DEPOSIT

DOUBLE MONEY PLAN (effective from October 17, 2008)
Period (Months) Rate of Interest payable (% p.a.)
84 10.41%
Min. Dep. Amt.(Rs.) 10,000/-

Interest Rates Applicable from October 16, 2008
ANNUAL INCOME PLAN
Period (Months) Rate of Interest payable (% p.a.)*
12 - 35 10.40%
36-60 10.15%
Min. Dep. Amt.(Rs.) 10,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

PREMIUM DEPOSIT- ANNUAL INCOME PLAN
Period (Months) Rate of Interest payable (% p.a.)*
15,20,30 10.55%
45 10.30%
Min. Dep. Amt.(Rs.) 10,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

CUMULATIVE DEPOSITS
Period (Months) Rate of Interest payable (% p.a.)* Maturity Amount for a Deposit of Rs. 10000/- *
12 10.40% 11040.00
24 10.40% 12188.16
36 10.15% 13364.52
48 10.15% 14721.02
60 10.15% 16215.21
Min. Dep. Amt.(Rs.) 10,000/- (Interest compounded annually)
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

PREMIUM DEPOSIT -CUMULATIVE
Period (Months) Rate of Interest
payable (% p.a.)* Maturity Amount
for a Deposit of
Rs. 10000/- *
15 10.55% 11346.58
20 10.55% 11832.54
30 10.55% 12865.98
45 10.30% 14455.83
Min. Dep. Amt.(Rs.) 10,000/-(Interest compounded annually)
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

MONTHLY INCOME PLAN
Period (Months) Rate of Interest payable (% p.a.)*
12 - 35 9.95%
36-60 9.70%
Min. Dep. Amt.(Rs.) 20,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

PREMIUM DEPOSIT- MONTHLY INCOME PLAN
Period (Months) Rate of Interest payable (% p.a.)*
15,20,30 10.10%
45 9.85%
Min. Dep. Amt.(Rs.) 40,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

NON CUMULATIVE DEPOSITS - HALF YEARLY
Period (Months) Rate of Interest payable (% p.a.)*
12 - 35 10.15%
36-60 9.90%
Min. Dep. Amt.(Rs.) 10,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

PPREMIUM DEPOSIT -NON CUMULATIVE ( HALF YEARLY )
Period (Months) Rate of Interest payable (% p.a.)*
15,20,30 10.30%
45 10.05%
Min. Dep. Amt.(Rs.) 10,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

NON-CUMULATIVE DEPOSITS - QUARTERLY
Period (Months) Rate of Interest payable (% p.a.)*
12 - 35 10.00%
36-60 9.75%
Min. Dep. Amt.(Rs.) 10,000/-
*0.25% p.a more for Senior Citizens
0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

PREMIUM DEPOSIT -NON CUMULATIVE ( QUARTERLY )
Period (Months) Rate of Interest payable (% p.a.)*
15,20,30 10.15%
45 9.90%
Min. Dep. Amt.(Rs.) 20,000/-
*0.25% p.a more for Senior Citizens

0.35%p.a more for Single deposit of Rs.1lac and above for period less than 36 months

0.45%p.a more for Single deposit of Rs.10lacs and above for period less than 36 months

0.10% p.a more for Single Deposit of Rs.10 lacs and above for period 36 months & above

Some of the features of HDFC Ltd Fixed Deposit are mentioned below.

HDFC has instituted well-defined service standards for both depositors and deposit agents. HDFC has been able to mobilise deposits from over 10 lac depositors. Outstanding deposits grew from Rs. 1,458 crores in March 1994 to Rs 10,384 crores in March 2007. Much of this success can be attributed to its strong brand image, superior services, security and above all, the significant contribution made by HDFC’s deposit agents. HDFC has over 50,000 deposit agents and distributes all its retail savings (deposit) products primarily through this channel.

HDFC has been awarded “AAA” rating for its deposits from both CRISIL and ICRA for the FOURTEENTH consecutive year , representing highest safety as regards timely payment of principal and interest.

Highest Safety:
‘FAAA’ and ‘MAAA’ rating affirmed for the Fourteenth consecutive year by CRISIL and ICRA respectively.

Tax Benefits:
TDS: No tax deduction at source on interest from deposits upto Rs. 5,000/- per branch in a Financial Year.

Attractive Returns:
HDFC deposits are Available throughout the year and offer Attractive, Assured returns to investors. Interest rates offered are higher than that offered by most of the commercial banks.

Quick Loan Facility:
Loan against deposit is available after 3 months from the date of deposit upto 75% of the deposit amount subject to the other terms and conditions framed by HDFC. Interest on such loans will be 2% above the deposit rate.

*This facility is not available for Easyway Savings and deposits from minors.

Nomination Facility:
Individual depositors, singly or jointly, can nominate under this facility. In case the deposit is placed in the name of a minor the nomination can be made only by a person lawfully entitled to act on behalf of the minor. Power of attorney holder or any person acting in representative capacity as holder of an office or otherwise cannot nominate. The nominee shall have the right to receive the amount due in respect of deposit on death of all the depositors and payment by HDFC to the nominee shall constitute full discharge to HDFC of its liability in respect of the deposit.

Demand Draft Facility:
Outstation depositors can send demand drafts after deducting demand draft charges. This facility is not available to investors under Easyway Savings. This facility is applicable for places where HDFC does not have an office.

High Service Standards:
Depositors are offered across the counter services for new deposits, renewals, repayments and loan against deposit facility. Further, all enquiries through email, post, telephone and in person are attended to immediately.

Electronic Clearing Service:
This facility is provided to depsoitor’s in select centres whereby the interest will be credited directly to the depositors’ bank account. The depositor would receive a credit entry “ECS HDFC” in his passbook/bank statement. Intimation of interest credited would be sent on an annual basis. Your bank will not levy any charge for this facility as per present RBI guidelines.

Presently this facility is being offered by us at the following centers -
ECS Centres : Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Hyderabad, Jaipur, Kanpur, Lucknow, Mumbai, Nagpur, Nasik, New Delhi, Pune and Vadodara.

Listed below is a Fixed Deposit comparision/review of rates and tenures of major foreign and local private and public sector banks in India. Many banks have revised their respective rates and fine tuned their tenures to suit their requirements.
The rates are for various minimum amounts.
Most competitive rates are listed to yeild a higher annualised returns within shortest stipulated time frames.
The prepayment penalties are not considered.

NAME TERM(DAYS/YRS) STATED RATES(%) SENIORCITIZENS(%)

HSBC 400 10.25 10.50

CITIBANK NA 365 10 10.50

BARCLAYS BANK PLC 366 10.50 N.A

STANDARD CHARTERED 401 10.50 N.A

DEUTCHE BANK 1-1.5YRS 7.50 N.A

KOTAK MAHINDRA BANK 365-389 10.50 N.A

ICICI BANK 390 10.50 11

HDFC BANK 9M OR 1 YR + 10.50 11
15/16 DAYS

INGVYSYA 365 11 11.50

TAMILNADU MERCENTILE 1YR 10.50 10.75
BANK

IDBI 1-2YRS 10.25 10.75

SBI 1-2YRS 10 10.50


Kindly check the respective rates with corresponding banks before making any investment decision.

Fixed Deposits Guide

A fixed deposit is best suited for those investors who want to invest a lump sum of money at a low risk and are comfortable committing it for a fixed period of time, and earn a rate of interest on th same.
Some of the salient features of a bank deposit are:

* Flexible Deposit Terms : The tenure of fixed deposits can vary from as low as 7, 15, 30 or 45 days to 3, 6 months, 1 year, 1.5 years to 5 years. The minimum deposit amount also varies with each bank. It can range from as low as Rs. 100 to an unlimited amount with some banks. The amounts can be in multiple of Rs. 100.
* Great Deals: The banks are free to offer varying rates of interest for products of different maturities. If you are flexible in terms of deposit tenures, you might find differential interest rates in odd tenures like 390 days or 200 days.
* Safe Investments: Bank deposits are generally safe investments because they are insured under the Deposit Insurance & Credit Guarantee Scheme of India.
* Flexible Interest Payment Terms : A Bank Fixed Deposit gives you the option of taking the interest income, as a lump-sum amount on its maturity as well as every quarter (quarterly interest payment) or every month (monthly interest payment)
* Electronic Clearing: The Interest payable on Fixed Deposit can also be transferred directly to Savings Bank or Current Account of the customer.
* Compounding: Compounding of fixed deposit interest rate is available for all deposits more than 3 months.


Tax implications

The interest income earned on a deposit is taxable at the same tax slab as the customer is in. It will be added to his income in the year under the head “Other Income”.


Fees and Charges

Normally, there are no charges for a plain vanilla fixed deposit account. Charges are usually levied on premature withdrawal of the deposit or taking additional features like a debit card against it.


Alternatives to Fixed Deposit Accounts


FMP- Fixed Maturity Plans ( A type of mutual fund)

The similarity first: Both have fixed tenures.

The differences:

1. Returns: A fixed deposit in India gives assured returns. You know what you are getting and when. An FMP will give an indicative, but not assured, return.
2. Investment Amount: You will be expected to invest a minimum of Rs 5,000 in an FMP. Not so in the case of a bank deposit, which can be less.
3. Tax Treatment: An FMP gets preferential tax treatment making it a better option then Fixed deposits for returns on a post tax basis. While fixed deposits are taxed at the normal tax rate – FMP dividends are tax free in the hands of the investor ( there is a 14.26% Dividend distribution tax deducted at source). And in case the investor opts for the growth option for tenures more than one year, his gains will be taxed as long term capital gains on debt investments. The tax rate under which is 10% without indexation and 20% with indexation benefit.


Company Deposits & Bonds ( Deposits with companies both financial and industrial)

The similarity first: Both have fixed tenures and have the same tax treatment.

The differences: Since these are investments with private companies with no insurance protection as well – these investments are relatively riskier then bank fixed deposits and consequently offer better returns as well.

They also have constraints in terms of the number of tenures that they offer deposits- usually short term deposits which are 6 months and less are not found in company deposits.


Watch Out For….

The NET RETURN that you get from an Fixed Deposit – Post compounding and tax payment. A rate which might seem higher upfront might have a lower return if it is not compounded as frequently.

For example; Bank X offers a one year deposit at the rate of 9% compounded half yearly – which results in an yield of 9.2%. While Bank Y offers a one year deposit at the same rate of 9% but compounded quarterly – which results in an yield of 9.3%

Five Vital Tips on Fixed Deposits

Key points to remember

1. Check the premature withdrawal penalty before investing.

Try and invest the money in a tenure within which you will not need the money. But definitely check on the charges applicable in case you need to withdraw in an emergency.


2. Check the frequency of compounding of the deposit, when comparing two deposit offerings.

A rate which might seem higher upfront might have a lower return if it is not compounded as frequently. For example; Bank X offers a one year deposit at the rate of 9% compounded half yearly – which results in an yield of 9.2%. While Bank Y offers a one year deposit at the same rate of 9% but compounded quarterly – which results in an yield of 9.3%. You will earn more interest on fixed deposits at Bank Y because your return is compounded annually.


3. Split your Fixed Deposit investments to avoid TDS deduction.

If the interest earned is more than Rs. 10,000 in a single branch in one calendar year then TDS would be deducted. By splitting your deposits across various banks or branches you can avoid this deduction.


4. Always appoint a nominee.

When you open a fixed deposit appoint a nominee. It is essential for a quick and hassle free transfer of accounts. The nomination facility enables the bank to release the deposit amount to the nominee without insistence on a succession certificate or probate of the will from your legal heirs.


5. Take interest payouts based on your requirements

Most banks have many interest payout options, choose the one which suits your requirements best for example if you are retired person you could go in for monthly payments of interest.

Fixed Deposits Buying Guide

I. How to Buy in 4 Easy Steps

* You need to determine the amount that you can set aside to invest in a Fixed Deposit. This is to ensure that the investment is tax efficient as well as does not attract any undue penalties.
* Compare fixed deposits and find out the best deal
* Visit the branch and read the fine print of the terms
* Provide the required papers and the cheque/draft for the deposit.


II. Buyer’s Checklist

For opening a fixed deposit in India where you do not have an existing banking relationship you would need to provide all the documents as needed for opening a new account. These documents for a resident individual include:
Identity Proof (You can provide anyone of the following)

* Original letter of introduction from existing bank along with KYC cheque of the same Bank
* Driving License
* Voter Identity Card with KYC cheque for operating accounts.
* Employee Identity Card
* PAN Card
* Defence Dependent's card
* Ex-Service Man Card
* Bar Council/Indian Medical Association Card/Senior Citizen Card

Proof of Address quoted for communication (You can provide anyone of the following)

* Introduction by an existing and satisfactory customer of the bank
* Latest Electricity Bill
* Certificate from the postal office confirming address of applicant
* Original Letter from Employer certifying the residential address of applicant. Signature of the employee has to be attested on the letter.
* Telephone bills from any telephone service providers
* Consumer gas connection card/book/Pipe Gas bill (same as electricity bill)
* Certificate from the ward/equivalent rank officer, maintaining election roll, certifying address of the applicant

The following documents are usually accepted as proof of both identity and address:

* Passport
* Freedom fighter's pass issued by Ministry of Home affairs, Government of India with photograph of applicant
* Pension payment order/book/Card issued by State/Central Government of India.
* Printed Ration Card with Photograph of applicant.
* Bank Pass Book with photograph issued by SBI and its subsidiaries or Nationalised Banks
* Arms License issued by State/Central Government of India authorities

Age Proof (if a senior citizen)

* Secondary School Leaving Certificate (Class 10)
* LIC Policy
* Voters Identity Card
* Pension Payment Order
* Birth Certificate issued by the competent authority
* Passport / Defence ID Card / Govt ID Card (Provided they have the cardholder's photo,signature and date of birth)
* PSU issued ID Cards
* Senior Citizen Cards
* Passport Size photographs


Documents needed for a Non Resident Indian(NRI) or Person of Indian Origin (PIO)are :

* Copy of passport and valid visa or work permit
* Identity Proof (Same proofs as Resident Individual)
* Address Proof of Indian Address (Same proofs as Resident Individual)
* Address Proof of Foreign Address

Utility Bill, i.e, Electricity Bill, Landline Telephone Bill, Gas connection Bill, Water connection Bill

1. Overseas/Indian Bank statement (Bank Passbook will not be considered as valid address proof)
2. Rent Receipt issued in last 6 months along with duly stamped/registered lease deed. Lease deed should be valid as on date of account opening.
3. Address on Passport
4. Letter from existing banker, this letter should clearly specify that the mentioned address is the customers communication address and period of relationship with the bank which should be more than 3 months.
5. Residence Permit (Government issued Identity Card)
6. Letter from Government postal authorities issued in last 6 months
7. Driving License (Only if issued by US & UK authorities)
8. Letter from the employer duly notarized issued in last 6 months mentioning your name and address.

* Passport Size photographs
* Attestation might be required for all these documents
* Sometimes, a cheque drawn on an existing banker in India or on your bank account abroad or an original cheque issued by you and paid by your banker outside India might be required to confirm banking relationship.



III Questions You Must Ask – What You Need to Consider Before Buying

Before opening a fixed deposit account, choose the tenure and amount that you are comfortable with and would not need to make a premature withdrawal from the same.

And ask the bank representative to explain the rate and the income from fixed deposit interest rates that you will be earning both pre and post income tax.
Get to know the charges for premature withdrawal or any other charges that might be levied on the deposit.
Choose the interest income payout frequency that suits your needs.

IV. How to Compare Products – How to Select the Best Product for Yourself

If you are not looking for any additional benefits like ATM card against a deposit or no penalties for premature withdrawals, the rate or the net yield that you will be earning on the deposit is the primary comparison parameter. You can use iTrust to get the best rates from the leading banks in India across product categories like NRI Deposits, Senior Citizen fixed deposits and Tax Saving fixed deposits.

V. Now That You Own the Product

A Fixed deposit is a reasonably low maintenance product, you just need to take care that the fixed deposit needs to be either renewed or withdrawn on maturity to avoid loss of interest in the interim period.
For a recurring deposit, regular payments need to be made as per the frequency chosen by you to ensure no loss in interest income.

VI. Understand the Fine Print and Know Your Rights as a Consumer

In case, you feel that the bank has been delaying the repayment post maturity or levying charges without telling you. You can report this to the Banking Ombudsman of your state as appointed by the Reserve Bank of India.

The following link gives you the names and addresses of the Banking Ombudsman across India:

http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=164