The good old FD’s are back in Flavor. With Investor’s losing their invested capital in the stock markets last year, more and more people are realizing that it is better to park money in avenues that may provide low returns but provide safety to their Capital. Gauging the mood, more and more companies are offering Fixed deposits to investors.
Tata Group company and Automobile major, Tata Motors has invited deposits from general public at attractive interest rates.
Following are the details of the Fixed Deposit Schemes:
HIGHLIGHTS OF THE DEPOSIT SCHEME
- Minimum Deposit of Rs. 20,000
- Additional deposit in multiples of Rs.10,000
- Recurring Deposit plan for employees
- Additional 0.5% interest for Senior Citizens, Shareholders and
- Employees of the company
Who Should Apply ?
- Investors who are looking for safety of capital and are comfortable with moderate returns on the invested capital can opt for the FD. It would be advisable to buy one Share of Tata Motors to get the additional 0.5% interest. However one should opt for a 3 Year time frame as it offers the maximum benefit and effective yield of 13.5%.
One should remember that Interest earned on Fixed deposit is taxable and hence the actual post tax yield varies from person to person depending on the tax bracket. This means that a person who does not fall into the highest tax bracket of 30% would benefit more from this scheme as the net tax outgo on the interest income would be lesser.
Why is Tata Motors raising money through deposits ?
Tata Motors is facing a liquidity crunch. The company needs money to refinance the $3 Million Debt it had raised for acquiring the Jaguar Land Rover. The company had also launched Right Issue in November 2008 which saw lukewarm response from the shareholders. The company has approval to raise Rs. 1930 crore through deposits from public.Read More!