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Archives - Ratekhoj.com, Indian Personal Finance Trends and News | Ratekhoj.com, Best Fixed Deposits, Loans, Insurance Rates and Credit Cards

August 26, 2009. Tata Motors, India’s largest automobile company, is reintroducing its fixed deposit scheme with new interest rates. The fixed deposits are intended to raise around Rs. 1500 crores according to a company announcement. The fixed deposits are offered for terms of 2 and 3 years with a minimum deposit of Rs. 20,000. Interest rates for these fixed deposit are 8.00% for the 2 year term and 8.75% for the 3 year term.

The fixed deposit scheme has two investment options for the public:

Investment Option I: Scheme-A Quarterly Income Plan*

Period

Minimum Amount (Rs.)

Rate of Interest (p.a)

2 Years

20,000

8.00%

3 Years

20,000

8.75%

* Monthly interest option available in case of deposits of Rs. 1 lakh & above

 

Investment Option II: Scheme-B Cumulative Deposit Plan

Period

Minimum Amount (Rs.)

Rate of Interest*(p.a)

Maturity Value (Rs.)

Yield (p.a)

2 Years

20,000

8.00%

23,433

8.58%

3 Years

20,000

8.75%

25,930

9.88%

* Compounded quarterly

 

Additional amount of deposits will be accepted in multiples of Rs. 10,000. Interest and maturity value payments are subject to deduction of tax at source, wherever applicable. Deposits will be accepted from Individuals, Minors (through Natural Guardians), Non Resident Indians on non repatriation basis (through NRO account only) and HUFs.

Complete details of the scheme can be obtained from the Tata Motors fixed deposits page.

Comparison of the fixed deposit interest offered by Tata Motors and other institutions in India can help you get the best interest rates in the institution of your choice.

According to Tata Motors, it is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer. Tata Motors, the first company from India’s engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain.

August 24, 2009. L&T Finance Limited (”the Company”), promoted by engineering and construction giant Larsen & Toubro Limited and L&T Capital Holdings Limited and providing a range of financial services, will open on August 18, 2009, its first-ever public offer of 50,00,000 Secured Redeemable Non-Convertible Debentures (”NCDs”) of the face-value of Rs. 1,000 each. The NCD Issue aggregates to Rs. 500 crore, with an option to retain over-subscription up to Rs. 500 crore for issuance of additional NCDs, aggregating upto a total of Rs. 1,000 crore. The NCD Issue with various investment options and yield on Redemption of upto 10.50% (per annum) opens on August 18, 2009, and closes on September 4, 2009.

The NCDs offered through the Prospectus are proposed to be listed on National Stock Exchange of India Limited (”NSE”). The face value of Rs. 1,000 per NCD and tradable lot size of 1 NCD is expected to enhance liquidity and trading in the secondary market.

The NCDs have been rated ‘CARE AA+’ by CARE and ‘LAA+’ by ICRA. Instruments with a rating of ‘CARE AA+’ by CARE are considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk. The rating of ‘LAA+’ by ICRA indicates high-credit-quality and the rated instrument carries low credit risk.

As compared to fixed deposits of 5 years duration, these L & T NCDs offer attractive interest rates.

Currently KTDFC (a company) offers the highest interest rate of 9.25 for a 5 year fixed deposit with a deposit amount of less than Rs. 25 lakhs which is the case for most retail fixed deposits. The next highest interest rate of 8.81% for 5 year fixed deposits for non-senior citizens is offered by T N Power Finance (also a company).

Among public sector banks in India, State Bankof Bikaner and Jaipur is offering the highest rate of 8.25% (annualized yield of 10.08%) for a FD term of 5-10 years. Among other banks, DBS Bank (a foreign bank) is also the same interest rate of 8.25% for a term of 5 years.

Investors in L & T NCDS can expect an annualized yield of 10.50% under Option 4 (details below) while the yield is lower under other options.

There are four investment options (please see the prospectus for complete details) for the L & T NCDs:

Option 1 (Quarterly interest payment): The face value is Rs. 1,000 and the minimum application is Rs. 10,000 (Retail) and Rs. 1,01,000 (NIIs and QIBs) and in multiples of Rs. 1,000 therein. The redemption date or maturity period is 60 months. from the deemed date of allotment. The coupon rate is 9.51% p.a. and the annualized yield is 9.85%. The interest payment is quarterly and the face value plus any interest that may have accrued is payable on redemption.

Option 2 (Semi-annual interest payment): The face value is Rs. 1,000 and the minimum application is Rs. 10,000 (Retail) and Rs. 1,01,000 (NIIs and QIBs) and in multiples of Rs. 1,000 therein. The redemption date or maturity period is 60 months from the deemed date of allotment. The coupon rate is 9.62% p.a. and the annualized yield is 9.85%. The interest payment is semi-annual and the face value plus any interest that may have accrued is payable on redemption.

Option 3 (Cumulative interest payment): The face value is Rs. 1,000 and the minimum application is Rs. 10,000 (Retail) and Rs. 1,01,000 (NIIs and QIBs) and in multiples of Rs. 1,000 therein. The redemption date or maturity period is 88 months from the deemed date of allotment. The coupon rate is 9.95% compounded annually and the annualized yield is 9.95%. The interest payment is cumulative and Rs. 2,005 per NCD is payable on redemption.

Option 4 (Semi-annual interest payment): The face value is Rs. 1,000 and the minimum application is Rs. 10,000 (Retail) and Rs. 1,01,000 (NIIs and QIBs) and in multiples of Rs. 1,000 therein. The redemption date or maturity period is 120 months from the deemed date of allotment. The coupon rate is 10.24% p.a. and the annualized yield is 10.50%. The interest payment is semi-annual and the face value plus any interest that may have accrued is payable on redemption.

August 22, 2009. Citibank, one of the world’s premier full service banks, has introduced Citi Titanium Cash Rewards Credit Card with a powerful rewards program.

With this Card you earn Cash Reward Points for all your spends, anywhere. You earn 1 point for every Rs. 200 you spend on weekdays (Monday to Friday) .

On weekends (Saturday and Sunday), you earn 5X rewards, i.e., 5 points on every Rs. 200 spent.

Each point carries value of 1 Rs.

This Card comes has an annual fee of Rs. 500.

 

August 21, 2009. According to an article in PTI, ICICI Bank CEO Chanda Kochhar indicated the interest rates for loans will start going up any time now, contrary to the projection by SBI Chairman that borrowers will not be impacted until Diwali.

PTI quotes Ms. Kochhar as follows:

I really believe that interest rates are not going to go down from here. Gradually they would go up. When? …would really depend on how fast the credit growth takes place

It’s difficult to say who will turn out to be right. Interest rates for home, car and other personal loans are quite attractive at the moment and borrowers can benefit from taking advantage of the interest rates now. Many banks including SBI are also offering a waiver of processing fees on their loan packages.

August 21, 2009. Banks will again start service charges on inter-bank ATM transactions just a few months after making all inter-bank ATM transactions free of service charges. You will incur these service charges if you make more than 5 inter-bank ATM transactions in a month.

Inter-bank transactions are those in which you make a ATM transaction on a ATM that’s not owned by the bank that issued the ATM card. Inter-bank ATMs are also referred to as third-party ATMs. ATM transactions on a ATM that’s owned by the bank issuing the ATM card will remain free.

All the banks had made inter-bank ATM transactions free in April of this year pursuant to RBI directives.

However according to the Indian Banks Association, the banks have made a proposal to RBI to limit the number of free inter-bank ATM transactions to 5 and RBI has agree to this proposal.

Banks will start levying you these service charges from October of this year. There will be a service charge of Rs. 20 per transaction according to the IBA.

India Today also reports that RBI has put a cap of Rs. 10000 per transaction on transactions involving inter-bank ATMs.

It’s not clear if all the banks will start levying these service charges or only some banks will do so.

One reason for the re-introduction of these service charges could be that banks want to limit the number of transactions which could have risen as a result of making the transactions free in April.

What do you think of banks levying service charges on inter-bank ATM transactions?

August 21, 2009. Sahil Group, a company involved in the Hospitality industry and setting up of spas and resorts, has launched a fixed deposit scheme to raise funds.

The company is offering fixed deposits with terms of 1 year, 2 years and 3 years.

The interest rate offered for fixed deposits with a term of 1 year is 11% with senior citizens being offered 11.25%.

The interest rate for a term of 2 years is 12% (seniors: 12.25%) and the depositors are being offered 12.50% (seniors also get 12.50%) for a term of 3 years.

 The minimum amount of deposit for these schemes is Rs. 10,000 with multiples of Rs. 5000 accepted beyond the minimum amount.

Interest on these schemes will be paid half-yearly in September and March.

More details on this scheme can be obtained from the Sahil Group website.

August 21, 2009. Bank of India has announced an extension of its special home loan scheme known as Star Home  Loan Scheme upto December 31, 2009.  The Star Home Loan Scheme is applicable only to new home loans and does not apply to takeover of home loans from other banks.

The interest rates for the Star Home Loan Scheme are fixed for a period of first 5 years. They are reset after 5 years.  After 5 years, the borrower will have an option to choose between fixed or floating rate, prevailing at that time.  At the time of switch over no charges would be levied (from fixed to floating).

For the first 5 years and loan amounts upto Rs. 5 lakhs, the interest rate is 8.50%. The margin for these home loans is 10%.

For the first 5 years and loan amounts between Rs. 5 lakhs and Rs. 20 lakhs, the interest rate is 9.25%. The margin for these home loans is 15%.

There are no processing charges and no prepayment charges on these home loans.

August 21, 2009. SBI Chairman, Mr. O . P. Bhatt, in an interview with Livemint has denied that the lower home loan interest rates being offered by SBI currently for the first few years of the loan are a gimmick. Mr. Bhatt said the following:

Tell me, where is the gimmick? Normally the rate of interest is 9.5% or 10%. I am saying I will give it to you for 8% for one year, two years or five years. Where is the gimmick here?

I am telling you orally, through advertisements, circulars, my bank mangers and through the documentation that you sign at the bank. Is it a gimmick to give loans at a cheaper rate? Is it misleading? Are we lying? Are we saying something wrong?

He also indicated that these new home loan offers are designed to help the economy during difficult times:

At a time when the economy is in so much of distress, the government has come out with more than on stimulus packages and RBI did its best to lower interest rates, as the largest financial player in the country we should also do something within our means, and within norms, laws and regulations.

The government had come out with two housing packages. One for up to Rs5 lakh and the other up to Rs20 lakh, with a concessional interest of 8.5% and 9.25%, respectively. These packages expired on 30 June.

What will happen to all those who did not so far make up their minds or get margin money? So we have introduced this package on our own. There is no gimmick in it. We are telling you what it is. If you don’t want, don’t take it.

SBI is currently offering an interest rate of 8% for the first 5 years of a home loan upto Rs. 5 lakhs. At the end of the five-year period, a customer opting for the Rs 5 lakh home loan can choose between a floating rate of 2.75 per cent below the State Bank Advance Rate or a fixed rate of 1.25 per cent below SBAR for a further term of five years.

For home loan amounts between Rs. 5 lakhs and Rs. 50 lakhs, the bank will offer 8 per cent during the first year and 8.5 per cent for second and third years. From the fourth year, the customer can choose between a floating rate of 2.75 per cent below SBAR or at a fixed rate of 1.25 per cent below SBAR.

For over Rs 50 lakh loans, the bank will charge 8 per cent during the first year and 9 per cent for second and third years. From the fourth year, the customer can choose between a floating rate of 1.75 per cent below SBAR or at a fixed rate of 0.75 per cent below SBAR.

Whether it’s a gimmick or not, these schemes are a boon to home buyers for the first few years.  However, they must be aware of the possibility of the loan interest rate and consequently their monthly loan payments (EMIs) going up after the initial low interest period. Proper financial planning is needed to avoid trouble in the future.

Do you think these schemes are a gimmick or not?

August 19, 2009. Chairman of the State Bank of India, O. P. Bhatt, indicated that home loan and auto loan seekers can expect a cut in interest rates in the next three to six months. This is according to an article in The Hindu.

According to Mr. Bhatt, rates may remain stable and even decline further in the three to six month period given the positive signs in the Indian economy. He did not project rates beyond six months given that economic conditions are dynamic and it’s difficult to predict interest rates on a longer term basis.

SBI has cut rates and offered incentives to new home loan and auto loan borrowers in the past few months to boost the retail borrowing segment.