Interest rates are on the rise. Given the recent two successive increase in repo rate, the rate at which the Reserve Bank of India (RBI) lends to banks, financial institutions have started increasing their lending rates and in turn their fixed deposit rates.  There are fixed deposit options available offering more than 8 per cent giving better options to investors, who for long have suffered long due to low-interest rates.

Mahindra Finance, the rural finance company, has increased interest rates on its term deposits twice this year within the period of two months. The revision in rates is effective from August 23, 2018. The interest rate for deposits upto 12-months have been increased by 30 basis points to 8.00 percent, while those for 18-months have been increased by 35 basis points to 8.10 percent, and for deposits upto 24-months rates have been hiked by 10 basis points to 8.35 percent.

Investors are eligible for 0.25 percent higher rates, if they choose the online mode of investment with a different tenure.

Dhanvruddhi Cumulative Scheme
Minimum
Amount
TenureAmount
Payable(Rs.)
Interest
p.a**
Effective
Yield p.a.*
Rs.
5,000 †
1555258.25%8.39%
2057208.35%8.63%
2760248.60%9.10%
3363018.75%9.46%
4066198.75%9.71%
Dhanvruddhi Non-Cumulative Scheme
Period
(Months)
Interest
p.a.*,**
(Yearly)
Interest
p.a.*,**
(Monthly)
158.25%7.75%
208.35%8.00%
278.60%8.10%
338.75%8.25%
408.75%8.25%
Min.Amount50000†150000†

** Compounded Annually . †Additional amount for fresh deposit in multiple of Rs.1000

Cumulative deposit option is for those who are not looking for regular income in the form of interest.

V. Ravi, Executive Director and Chief Financial Officer, Mahindra Finance, said, “Fixed deposits have become the most preferred investment instruments for planning a financially worry-free future. We believe the interest rate environment is likely to remain firm going forward. Mahindra Finance’s Fixed Deposits are specially designed to suit all segments of depositors, providing assured returns with a very low-risk.”