Portfolio : A collection of investments owned by the same individual or organization.
Will : legal declaration of how a person wish his/her possession to be disposed after their death
Repatriation : It is the process of returning a person to his/her country of origin, such as refugees.
Fund : An amount of money saved or collected for a particular purpose
Return : Profit or loss derived from an investment
It is the maximum amount, the insurance company agreed to pay in case of claim by the policyholder. The amount depends on the amount of damage/loss happened and the premium paid by the policyholder. It is also known as sum assured.
A set of assets which an investor holds. This may contain equities, mutual funds, insurance and other cash equivalents.
Current FD rates (w.e.f. 22nd August 2019) offered by Mahindra Finance are much higher compared to other banks’ FDs.
In this post, we will look at the key insights of the FD Schemes of Mahindra Finance and review whether the FD investment offered by Mahindra Finance is worth investing or not?
10-Key Features of Mahindra Finance FD Scheme
1. Mahindra Finance group offers FD in 3 categories
- Samruddhi Scheme
- Dhanvruddhi Scheme
- Dhansamruddhi Scheme
2. Mahindra Finance FD provides 2 options to invest: Cumulative and Non-Cumulative.
- In the cumulative option, the interest amount would be paid only on maturity.
- Whereas, in non-cumulative options, interest would be paid as per investor’s selection: Monthly, Quarterly, Half-Yearly or Yearly.
3. Interest rates of all the schemes are revised from 22nd August 2019 onwards.
4. The minimum investment is Rs. 5000 in Mahindra Finance FD (Samruddhi and Dhanvruddhi Schemes), and Rs. 10,000 for the DhanSamruddhi scheme.
6. You can open any scheme of Mahindra Finance FD through ONLINE mode.
7. Interest rates in this FD are ranging from 7.6% to 8.8%. The effective yield ranges from 7.8% to 10.49%.
8. Mahindra finance offers accidental death insurance coverage of Rs 1 Lakh only for the depositors in the age group of 18 to 70 years.
9. FD interests are 0.1%-0.25% higher for Senior Citizens as compared to the general public. Employees and relatives of Mahindra Finance would get 0.35% higher interest rates.
10. Premature withdrawal from this FD is possible only after 3 months from the date of deposit or from the renewal of deposit. However, withdrawals are not allowed during quarter closures or year closures on specific dates due to accounting closures.
Description of Mahindra Finance FD Schemes
- It provides FD investment under CUMULATIVE and NON-CUMULATIVE options.
- The minimum deposit amount under the CUMULATIVE option is Rs. 5000/-. Whereas the minimum deposit under the non-cumulative option is Rs. 50,000/-.
- Tenure of this FD is 1 year to 5 years, that is, 12 months to 60 months.
- The maximum investment limit in this FD Scheme is Rs 1 Crore.
- FD Interest rates are up to 8.45% per annum. The highest Yield is 10%. It varies for public and senior citizens as shown in the table below
- This FD can be opened online.
The interest rate and the effective yield details of Samruddhi Scheme for General Public and for Senior Citizens are shown in the table below. (Image source: Mahindra Finance)
Interest rates for Public:
Interest rates for Senior Citizens:
Samruddhi Scheme also comes with another version for Bulk Deposit of above 5 Crores. The minimum amount in this version is Rs. 5 Crores. And, the FD interest rates are up to 8.2% per annum. The Highest Yield is 9.66%. A detailed description of interest rates are shown in the table below:
- It offers Cumulative and Non Cumulative options of FD investments.
- For the cumulative option, the minimum FD deposit is Rs 5,000. And for the non-cumulative option, the minimum FD Deposit is Rs 50,000.
- The tenure of this FD is between 15 months to 40 months.
- You can invest up to Rs 1 Crore in this FD scheme.
- FD Interest rates are up to 8.7% per annum. The highest Yield is 9.65%. Senior citizens receive 0.1% more benefit than the public, as illustrated in the tables below:
Interest Rates for Public:
For Senior Citizens:
- It also offers Cumulative and Non Cumulative options, similar to the other 2 schemes, described above.
- The minimum FD deposit is Rs 10,000 for cumulative option and Rs 50,000 for non-cumulative option.
- The tenure of this FD is between 38 months to 44 months.
- FD Interest rates are up to 8.5% per annum and the Highest Yield is 9.54%.
- The maximum limit of investment in this FD is Rs 1 Crore in this FD scheme.
- Detailed interest rates for Public and the Senior Citizens are shown in the table below:
Interest Rates for Public:
Interest Rate for Senior Citizens:
How to Open Mahindra Finance FD Scheme Online?
Mahindra Finance FD Scheme can be opened online in the 4 basic steps given below:
- 1. Enter your basic details such as name, date of birth, email, etc. and choose your desired FD schemes out of the 3 discussed in the above section.
2. Confirm the details and select your payment mode.
3. Make a payment of your desired amount.
4. Upload your KYC and other additional details.
You can click this link to open Mahindra Finance FD Scheme online
If you wish to open through offline mode, you can check the Mahindra Finance FD Form.
What documents are required to open the Mahindra Finance FD Scheme?
Any of the below documents can be used for KYC:
- 1. Aadhar Card
2. PAN Card
4. Driving License
5. Voter’s ID card issued by the election commission of India.
6. The Job card issued by NREGA duly signed by an officer of the State Government.
Commonly asked Questions on Mahindra Finance FD Schemes
1. How safe is the Mahindra Finance FD Scheme?
The Mahindra Finance FD Schemes are rated by CRISIL as FAAA, which indicates the high level of safety for interest payments and repayment of capital. So, your investment in this FD is safe. But, keep in mind that these ratings may also change over the period of time. So, you should always keep an eye on them and review them periodically.
2. How the Interest received on these FDs is taxed?
Mahindra Finance would deduct TDS on interest exceeding Rs 5,000 per annum. However, one needs to calculate the total interest received and pay income tax based on the income tax slab applicable to them.
3. Is it possible to take a premature withdrawal of this FD?
It is possible to take a premature withdrawal, only after 3 months from the date of deposit or from the renewal of deposit. But, premature withdrawals are not allowed during quarter closure or year closure on specific dates due to accounting closures.
4. When to submit Form 15G or Form 15H?
You can submit a form 15G or 15H to the company not to deduct TDS on their FD interest. It can be submitted online or offline anytime.
5. Can NRIs invest in this FD Scheme?
Yes. NRI’s can invest in this FD scheme on a non-repatriation basis.
6. For non-cumulative deposits, when the interest payments can be done?
In the case of non-cumulative deposits, interest would be paid on the last day of the month or quarter or half-year or year based on the scheme and option chosen by the investor.
7. Where to ask for queries regarding Mahindra Finance FD Scheme?
You can reach any of the following details for queries or complaints.
Email ID: firstname.lastname@example.org, Contact No. 1800 266 9266
Also, you can reach out to the Mahindra Finance office in your respective cities.
Review of Mahindra Finance FD Schemes 2019: Should you invest or Not?
Mahindra Finance has been a trusted brand so far. Its FDs have a good credit rating from CRISIL. But, you cannot make an investment decision based on its current credit rating. This investment is not forward-looking and it can become reviewed and downgraded in the long term. Also, you should consider the NBFC crisis going on these days.
Therefore, only if you are a high-risk taking investor and willing to consider the major risks involved in these FD Schemes, you can go ahead and invest in this scheme.
Otherwise, it is NOT suggested.
Instead, of investing in Mahindra Finance FDs, you should consider investing in accrual-based income funds where your risk is spread across multiple debt instruments. This will also help you to diversify the investment risk.
Company FDs are tempting due to the high rate of interest that they provide as compared to FDs offered by private and public sector banks. However, they are an unsafe investment option. As they are not secured against the assets of the company, the chances of default in payment of interest and principal are significantly higher than banks. If the company becomes a defaulter, you may lose all your money.
Whereas, the Accrual funds are a type of Debt Mutual Funds. They typically invest in short to medium maturity plans. They take credit risk and invest in lower-rated securities for the sake of generating a higher yield. They also focus on generating better returns compared to any FDs. They will not invest in one single security, they will invest in a diversified portfolio of debt securities. Also, the fund manager reviews the portfolio periodically on credit risk and return potential and revamp the portfolio. Therefore, your risks will reduce significantly and your investment will be comparatively safer.
We hope this review of Mahindra Finance FD has given you the clarity on taking your investment decision into this scheme.
If you have any further queries based on this FD, you can post them in the comment section below: