Mahindra Fd Finance - Financial Tips

review mahindra finance fd offers interest

Mahindra Finance Fixed Deposits

Mahindra & Mahindra Financial Services Limited (Mahindra Finance) offers fixed deposits (FDs) as a secure investment option, primarily targeted towards individuals looking for relatively stable returns. Mahindra Finance FDs are non-banking financial company (NBFC) deposits, meaning they are not offered by a traditional bank.

Key Features & Benefits

Competitive Interest Rates: Mahindra Finance typically offers interest rates on their FDs that are higher than those offered by many leading banks, making them an attractive option for investors seeking better returns. However, these rates are subject to market fluctuations and can change without prior notice.
Flexible Tenures: Investors can choose from a range of tenure options, usually spanning from 12 months to 60 months, allowing them to align their investment horizon with their financial goals.
Cumulative & Non-Cumulative Options: FDs are available in both cumulative and non-cumulative options. Cumulative FDs offer reinvestment of the interest earned, leading to higher returns at maturity. Non-cumulative FDs provide periodic payouts of interest (monthly, quarterly, half-yearly, or annually) which is beneficial for individuals looking for a regular income stream.
Safety & Security: While NBFC FDs are not covered by deposit insurance provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), Mahindra Finance is a well-established and reputable company within the Mahindra Group. Investors should evaluate the company’s credit rating provided by rating agencies like CRISIL, ICRA etc. These ratings indicate the company’s ability to meet its financial obligations, including the repayment of deposits.
Loan Facility: Mahindra Finance usually offers a loan facility against the FD after a certain period, allowing investors to access funds in case of an emergency without breaking their FD.
Easy Application Process: Applying for a Mahindra Finance FD is generally straightforward, with options available online and offline through their branch network.

Things to Consider

Credit Rating: Always check the credit rating of Mahindra Finance from reputed rating agencies before investing. A lower rating indicates higher risk.
Premature Withdrawal: Premature withdrawal of the FD is usually permitted, but it may attract penalties in the form of reduced interest rates. Investors should be aware of the penalty structure before investing.
Tax Implications: Interest earned on FDs is taxable as per the investor’s income tax slab. Tax Deduction at Source (TDS) is applicable if the interest income exceeds a specified threshold. Form 15G/15H can be submitted to avoid TDS if your income falls below the taxable limit.
NBFC Risk: Remember that NBFC FDs are riskier than bank FDs because they are not insured by DICGC. Thoroughly research the NBFC before investing.

Conclusion

Mahindra Finance Fixed Deposits can be a viable investment option for individuals seeking higher interest rates than traditional bank FDs, provided they carefully assess the associated risks and the company’s credit rating. Consider your risk tolerance, investment horizon, and financial goals before making a decision. Consult with a financial advisor if needed.