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Duration and eligibility of the deposit
Indian Resident Individuals and Hindu Undivided Family (HUF) can file for a maturity period of 12 months, 24 months, 36 months, 48 ​​months, 60 months. For recurring deposits with a 12-month maturity, Shriram Transport Finance Company will offer you an interest rate of 7.03%, deposits with a 24-month maturity will earn an interest rate of 7.12%, for deposits with a maturity of 36 months an interest rate of 8.18%, for deposits with a maturity of 48 months will offer an interest rate of 8.34% and the company will offer you a rate of ‘interest of 8.50% for deposits with a maturity of 60 months. From the date of deposit until March 31, the aforementioned relevant interest rates will be calculated on each monthly payment amount. These rates are applicable for a recurring deposit of a minimum amount of Rs 500.
Shriram Transport Finance Company Interest rate on recurring deposits
The recurring interest rates on Shriram Transport Finance Company deposits are as follows, as of August 1, 2021.
| Period (months) | Rate% (pa at monthly rest) | Maturity value for a monthly payment of Rs 500 |
|---|---|---|
| 12 | 7.03 | 6,230 |
| 24 | 7.12 | 12 930 |
| 36 | 8.18 | 20,460 |
| 48 | 8.34 | 28,565 |
| 60 | 8.50 | 37,500 |
| Source: stfc.in |
Premature withdrawal
Shriram Transport Finance Company also allows early withdrawal on recurring deposits. The prepayments of interest are as follows.
| Up to 3 months from RD date (lockout period) | No reimbursement (Not applicable in the event of early reimbursement in the event of the death of the depositor) |
|---|---|
| After 3 months to less than 6 months | Of no interest |
| After 6 months but before the due date | The interest payable will be 2% less than the applicable interest, if no rate has been specified for that period then 3% less than the minimum rate at which RDs are accepted will be applied. |
Should we invest?
Recurring deposits are a popular investment choice for salaried individuals with a low tolerance for risk who are willing to contribute towards their deposit on a regular basis in return for a predetermined interest rate. While we are talking about recurring deposits, they are a good choice for both short and long term financial goals, and unlike debt instruments, Corporate RD returns are unaffected by market fluctuations.
However, while Shriram Transport Finance Company’s recurring filing scores high, such approaches help mitigate risk but are not purely risk-free. If the firm’s monetary health capacity declines, the RD may be subject to default risk, resulting in loss of interest and possibly the principal amount. Therefore, investors with a high risk appetite should look for corporate intellectual property securities rated “AAA†or higher to reduce the risk of collapse.
Those who do not wish to invest in recurring business deposits due to the risk can invest in recurring postal deposits with an interest rate of 5.8% or recurring deposits from private sector banks or small banks. financial institutions with an interest rate of up to 8%, where their deposits and earned interest are safe as they are insured by the Deposit Insurance and Credit Guarantee Company (DICGC) up to Rs 5 lakhs.
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