Tamil Nadu Power Finance Fixed Deposit Scheme:
Are you wondering if it’s safe to put money into a Tamil Nadu Power Finance Fixed Deposit Scheme? These FDs have an ICRA rating of “MA-Stable.”
The rating will remain in effect until August 31, 2021. Because it is owned by the state of Tennessee, it may be considered a safe FD, despite the fact that it is not stated expressly on the application form or on their website.
The Tamil Nadu Government owns 100% of Tamil Nadu Power Finance. Because the entity is controlled by the Tennessee government, its FDs are protected.
It has the highest interest rates, with a yield of 10.46 percent. Even TN Power Finance FDs may be opened online, making the procedure more convenient than the manual procedure.
The fact that these FDs are guaranteed by the TN government is not disclosed anywhere on their website or application form (while the entity is owned by TN Govt).
Some of the negative characteristics mentioned above, such as early withdrawal guidelines + sluggish transaction processing, should be considered. Aside from that, it’s a solid and secure FD program to invest in.
Investing, borrowing, lending, budgeting, saving, and forecasting are all examples of financial management. Personal, corporate, and public/government finance are the three basic categories of finance.
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We are going to learn about this topic in this article.
- Is it a good idea to put money into Tamilnadu Power Finance?
- How can I make a TN Power Finance FD investment?
In the previous few quarters, banks have been lowering their FD rates. Tamil Nadu Power Finance FD program might be the best pick for you if you’re seeking a safe investment choice with higher interest rates.
TNPFC (Tamilnadu Power Finance and Infrastructure Development Corporation) has higher interest rates of up to 8.77 percent and yields of up to 10.46 percent. Because the entity is held by the Tamilnadu government, these FDs are regarded safe.
What’s the Difference Between Yield and Return?
Yield and return are two distinct techniques of calculating an investment’s profitability over a defined period of time, usually a year.
The yield is the amount of money earned or lost on an investment over time, generally represented as a percentage, whereas the return is the amount gained or lost on an investment over time, generally represented in dollars.
The revenue earned from holding a security, such as interest, is referred to as yield. The yield is often represented as an annual percentage rate depending on the cost, current market value, or face value of the investment.
Because certain securities may undergo value swings, yield may be regarded as known or expected depending on the investment in question.
The financial gain or loss on an investment is known as return, and it is commonly stated as the change in the dollar value of the investment over time.
Return, often known as total return, is the amount of money an investor made from a certain investment during a specific time period.
Interest, dividends, and capital gains, such as a rise in the stock price, all contribute to total return. A return, in other terms, is retroactive or backward-looking.
About TN power finance corporation:
Tamil Nadu Power Finance and Infrastructure Development Corporation Limited is a company based in Tamil Nadu, India (TNPFC)
TNPFC is fully owned by the Tamilnadu government. 7.00389 is the RBI’s registration number for a non-banking finance company. As a Hire Purchase Finance Company, they are classified. It raises money through a variety of deposit schemes.
It gives Tamil Nadu Generation and Distribution Corporation Ltd funding and gives financial assistance to power and infrastructure projects.
Since its beginning, the Corporation has been profitable. It reported a 30 percent profit after tax dividend for the fiscal year 2017-2018.
Tamil Nadu Power Finance Fixed Deposit Scheme is in accordance with RBI regulations. It’s worth noting that these FDs aren’t mentioned as being guaranteed by the Tennessee government anywhere on the website or in the application process.
Details of the Tamil Nadu Power Finance Fixed Deposit Scheme in 2021
1) Power Finance in Tamil Nadu FDs have a one-year to a five-year term.
2) There are both cumulative and non-cumulative choices in this FD plan. The interest would be paid on maturity if you choose the cumulative option. Interest would be paid monthly, quarterly, or annually under the non-cumulative option, depending on the choice selected.
3) This FD program allows you to deposit a minimum of Rs 50,000 in multiples of Rs 1,000.
4)TN Power Finance is a fourth option. The general category has interest rates ranging from 7% to 8.5 percent.
5) Senior citizens would receive a 0.25 percent interest rate increase.
There is a distinction between cumulative and non-cumulative. Term Deposit
Fixed Deposits are one of the safest investment alternatives since they allow customers to collect interest on their money for a certain period of time and at a set rate of interest.
You may have come across the words Cumulative and Non-Cumulative FD when investing in a Fixed Deposit. There are two sorts of Fixed Deposits, depending on how you choose to receive your interest payments.
Those who invest in a Cumulative Fixed Deposit have their interest compounded annually and paid at maturity. Non-Cumulative Fixed Deposits, on the other hand, pay interest monthly, quarterly, half-yearly, or annually, depending on your needs.
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Two types of FD options in Tamil Nadu Power Finance Fixed Deposit Scheme. Here is it.
1) Non-cumulative: These FDs come with terms of 2 years, 3 years, 4 years, and 5 years. Depending on the term, interest rates range from 7.25 percent to 8.77 percent. On certain tenures, senior citizens would receive an extra 0.5 percent interest rate.
2) Cumulative Interest: These FDs have a one-year, two-year, three-year, four-year, and five-year term. Interest rates range from 7% to 8.5 percent, depending on the length of time the FD is held. On particular duration FDs, senior citizens might earn up to 0.5 percent more interest.
Cumulative FD vs Non-Cumulative FD: Where do you want to invest your money?
Your investing needs will determine whether you choose Cumulative or Non-Cumulative. Cumulative Fixed Deposits are suitable for investors who don’t require frequent income flows but want to save for long-term goals like creating a retirement nest egg. Or short-term goals like covering a large bill.
Such investors can acquire enough money to fund their aims by investing in a Cumulative FD. Investors who require regular income, on the other hand, can invest in a Non-Cumulative FD and get dividends on a regular basis.
The dividends on these deposits might be viewed as a substitute for regular earnings, making it easier for retirees to meet their monthly costs.
What are the interest rates on Tamil Nadu Power Finance FDs in 2021?
The interest rates for the general category are listed below. On certain tenures, senior citizens would receive up to 0.5 percent additional interest; otherwise, they would receive just 0.25 percent. Please refer to the appropriate columns.
Who may open a Fixed Deposit with Tamil Nadu Power Finance?
This FD is open to the following individuals.
1)Individuals who live in the area
2) Hindu Undivided Family (HUF)
4) Government-owned corporation
5) Private Businesses
6) Groups of people
7) Non-resident Indians (NRIs) are also eligible to open this FD plan, but only under specified conditions.
How can I open or apply for a Tamil Nadu Power Finance Fixed Deposit Scheme online?
In general, all fixed deposits may be opened online these days. However, the FD system in government entities is virtually entirely manual.
However, the Tamil Nadu Power Finance FD Scheme has a robust web presence. To learn how to deposit in Tamilnadu power finance, go to this page.
TNPFC FD Offline can also be opened by submitting paperwork to the closest location. For further information, please visit the website.
What papers are needed to start a Tamil Nadu Power Finance Fixed Deposit Scheme?
To start a TNPFC FD, you must submit an Aadhaar Card.
If the depositor wants to use a different address than the one listed on the other documents, any of the following documents must be supplied as Proof of Address:
- Telephone bill (not older than three months)
- Bank Account Statement of a Scheduled bank
- Electricity bill (not older than three months)
- Water bill (not older than three months)
- Voter ID
- Driving license
If the address shown in the preceding papers does not match the current address, a copy of any of the following papers should be provided as evidence of residence.
Telephone bill/bank account statement/letter from any recognized governmental authority/electricity card/employer letter The firm will not be able to complete the deposit/renewal application if the required papers are missing.
Pros and cons of Tamil Nadu Power Finance Fixed Deposit Scheme:
1) The Tamil Nadu Power Finance and Infrastructure Corporation (TNPFC) is a government-owned company in Tamil Nadu, and its FDs are safe to invest in.
It’s worth noting that neither their website nor the application form contains any information about the TN government guaranteeing these FDs.
2) You may invest a minimum of Rs 50,000 in this FD plan to obtain greater interest rates of up to 8% for normal investors and up to 8.77 percent for Senior Citizens, as well as a high yield of up to 10.46 percent.
3) You may choose from a variety of FD alternatives, including cumulative FDs, monthly interest FDs, quarterly FDs, and yearly interest FDs.
1) The regulations against premature withdrawal make it unappealing.
2) The creation and closing of FDs in government-owned entities would occur at the same time. It cannot happen at the same time as it does in banks. There was a lag throughout the entire process of opening, processing, and closing.
Here are the FD scheme’s preliminary guidelines.
a) If you choose to close your FD within 3 to 6 months of opening it, you will not be charged any interest.
b) If you choose to close your FD after 6 months but before 12 months, you’ll earn a 3% lower rate than the interest rate given for a 12-month term FD.
c) If you choose to close your FD after 12 months but before 24 months, you’ll get a 2% discount on the interest rate given for a 24-month term FD.
d) If you choose to close your FD after 24 months but before 36 months, you’ll earn a 2% lower rate than the interest rate given for a 36-month term FD.
e) If you choose to close your FD after 36 months but before 48 months, you will obtain a 2% lower interest rate than the rate given for a 48-month term FD.
For FD premature withdrawal, you must notify the bank 15 days in advance.
Is it possible for NRIs to invest in this FD Scheme?
Yes, indeed. The following are the instructions for NRIs who want to invest in the TNPFC FD plan.
a) NRI deposits are allowed in accordance with the Income Tax Act of 1961.
b) NRIs should send from their non-repatriation Non-Resident Ordinary assets with banks, provided that the amount deposited with the firm does not constitute inward remittances or transfers from NRE/FCNR (B) accounts to the NRO account.
c) NRI investments are allowed on the condition that the maturity value of the deposit, as well as any income earned on it, shall not be transferred outside of India.
d) NRI deposits can only be held for a duration of 36 months.
Loan policy of tpfc:
Types of loan products:
Hire Purchase – This is an arrangement in which a borrower commits to a contract to purchase an asset by paying the item’s price plus interest in regular monthly payments over a period of time.
Secured Loans – A secured loan is one in which the borrower promises an asset as collateral for the loan, which then becomes a secured debt owing to the lender. Various types of secured loans include:
hypothecation loan:– A charge on any moveable property, whether physical or intangible, present or future, created by a borrower without surrender of possession of the item is referred to as a hypothecation loan.
The term “mortgage” refers to a loan secured by real estate.
Leasing is a contract in which the owner, known as the Lessor, allows the user, known as the Lessee, to use an asset for a length of time that is less than the asset’s economic life without transferring ownership rights.
The Lessor grants the Lessee the right in exchange for recurring lease payments for a certain period of time.
Unsecured Loans – These are loans that are not backed up by any tangible or intangible assets.
This list of loan products is meant to be illustrative rather than complete. New products may be produced from time to time and added to these Loan Products with the agreement of the Board of Directors, depending on the opportunities available.
Money is both the raw material and the finished product for a finance company. As an NBFC, it raises cash from the general public, institutions, temples, and boards, and then lends it to borrowers as a loan.
As a result, the Company must guarantee that varied borrowings are adequately serviced and that repayments are made on time, necessitating timely and punctual payback by its borrowers.
A fully promised mechanism for recovering dues, as well as the selection of borrowers to whom money is to be provided, should be in place to assure fast return by borrowers.
A substantial portion of the Company’s collection activities would have been taken care of if adequate attention was used in the borrower selection. In this situation, the requirement for a solid credit evaluation system becomes even more critical.
Pre-disbursement and post-disbursement are the two basic categories of operations involved. The proper document is an important aspect of the pre-disbursement method, and recovery is crucial in the post-disbursement phase.
Basic money lending guidelines:
TPFC follows basic lending guidelines regardless of the size of the loan, whether it is to an individual or a major multinational organization.
TNPFC will grant a loan in accordance with the Memorandum of Association’s goal clause (MOA).
On a regular basis, the Asset Liability Committee will decide on the lending rate interest (considering the market conditions or peer group).
The company’s purpose is to raise the funds through the debt market and public deposits, with TANGEDCO and TANTRANSCO as its primary borrowers.
TNPFC will provide a Term Loan to TANGEDCO to cover their Capital Expenditure in exchange for a Negative Lien on the unencumbered portion of TANGEDCO’s assets as collateral.
TERMS AND CONDITIONS IN GENERAL
Amount of Loan – Determined by Management based on cash flow.
The loan is the type of assistance provided.
Period – A maximum of 5 years is allowed.
Interest Rates – Interest rates will be calculated using deposit rates and weighted average capital. The rates will be decided by the Board of Directors, based on the Asset Liability Management Committee’s suggestion.
Principle Repayment – The principal amount will be repaid in monthly installments on the last day of each month.
The type of loan determines the level of security. It must be stated in the loan contract.
Pre-closure costs – With prior written approval from the firm and in accordance with the terms and circumstances set by the Board, the borrower may prepay all or part of the loan at any time.
The TN Power Finance Fds have tax consequences.
If the investment amount exceeds Rs 5,000, a TDS would be applied to the TN Power Finance Corporation fixed deposits.
If your income falls below the government’s threshold, you can file Form 15g or Form 15h, depending on the situation.
A loan request can also be made against the deposit, with the interest rate somewhat higher than the FD rate. Taking a loan against Fds, on the other hand, is not recommended.
Given the current state of interest rates in the country, this fixed deposit is a good option if you have some spare cash. However, it is best to go for a short-term contract.
Following the expiration of three months from the date of deposit, an NBFC may provide depositors a loan up to 75 percent of the amount of the public deposit at a rate of interest one percentage point higher than the interest rate due on the deposits.
The interest on the loan will be deducted from the interest due on Regular Interest Payment Deposits (RIPD) and compounded basis on Cumulative Interest Payment Deposits (CIPS) and recovered when the loan is repaid or the deposit matures.
If the deposit is not claimed for refund or renewal, the loan on interest-bearing deposits, if any, will be applied to the deposit on the maturity date.
Depending on how many days have passed since the loan was last repaid, It is necessary to categorize risks. With the agreement of the Board, the Management and Asset Liability Committee may investigate additional action, which might include: 1. Restructuring the loan
- Putting in place a plan to liquidate the collateral.
- Serving a notice of default and intent to reclaim the property.
- Create an expected recovery time period as well as an anticipated recovery amount.
Individuals can request that Tamil Nadu Power Finance not collect TDS on their FD interest by filling out form 15G or 15H.
Stable Deposits are one of the most popular investment alternatives for most investors since they offer a fixed interest rate and good rewards. Fixed deposit interest, on the other hand, is completely taxed.
TDS threshold for banks and post office deposits has been raised to Rs. 40,000 from Rs. 10,000 in the previous Budget, while it remains at Rs. 5000 for NBFCs.
What is the purpose of Form 15G?
If the following requirements are satisfied, Form 15G can be utilized to avoid TDS deduction on income
- You are a person (and a Resident Indian), a HUF, a trust, or any other type of assessee, but not a corporation or a firm
- You are under 60 years old.
- Your overall income is taxed at zero percent.
- Your total interest income for the year is less than the basic exemption level, which for the fiscal year 2020-21 is Rs. 2.5 lakh (AY 2021-22)
What is the procedure for completing Form 15G or Form 15H?
You can begin filling out Forms 15G and 15H once you’ve satisfied the requirements for submitting them. The following are the steps you must take:
- Fill out the various areas on Forms 15G and 15HA.
- attach a copy of your PAN to the declaration
- Send the forms to your lender.
If you want to avoid long lines and time-consuming procedures, you may file these applications online.
Forms 15G and 15H are both valid for one year and should be presented to your lender at the beginning of the year. Before you submit the documents, make sure your financier does not withhold the tax since the bank may not be able to repay it.
You may need to file an ITR and request a refund of your TDS amount to get your money back.
How can I get the PDF versions of Forms 15G and 15H?
To obtain a copy of Form 15G or Form 15H, follow these steps:
Visit the website of the Internal Revenue Service.
Look for Form 15G or Form 15H under ‘Frequently Used Forms,’ depending on your needs.
Download the form by clicking the PDF icon next to it. Print three copies of the form after you’ve downloaded it. Sign the printed paperwork and return them to your lender.