Individuals who want guaranteed returns can participate in fixed deposit programs offered by the Tamilnadu government. Under this scheme, Tamil Nadu Power Finance & Infrastructure Development Corporation Limited and Tamil Nadu Transport Development Finance Corporation Limited are two government organizations that offer fixed deposit programs to the general public and elderly citizens at competitive rates of Interest.
Do you want to know more about the schemes offered by Tamil Nadu Govt and know the best option to invest in? Here is a complete list of schemes available, along with their benefits.
Which Schemes come under Tamil Nadu Govt FD?
PIPS
Interest is paid on a monthly, quarterly, or yearly basis as per the Period Interest Payment Scheme (PIPS). The minimum value for investment should be at least Rs. 50,000.
Interest Rates of Period Interest Payment Scheme
| Tenure | Monthly | Quarterly | Yearly |
| 24 months | - | 7.25% | - |
| 36 months | 7.75% | 7.75% | 7.98% |
| 48 months | 7.75% | 7.75% | 7.98% |
| 60 months | 8.00% | 8.00% | 8.24% |
MMS
The Interest in a Money Multiplier Scheme is compounded every quarter at the relevant rate and paid along with the Principal upon maturity. This scheme requires a minimum deposit of Rs.50,000.
Interest Rates of Money Multiplier Scheme
| Tenure | Basic Rate | Effective Yield |
| 12 months | 7.00% | 7.19% |
| 24 months | 7.25% | 7.73% |
| 36 months | 7.75% | 8.63% |
| 48 months | 7.75% | 8.99% |
| 60 months | 8.00% | 9.72% |
Tamil Nadu Power Finance and Infrastructure Development Corporation Limited Fixed Deposit Schemes
The Tamil Nadu Power Financial & Infrastructure Development Corporation Limited (TNPFC) is a non-banking finance organization owned by the Tamil Nadu government. It provides two types of fixed deposits.
- Non-cumulative fixed deposits
- Cumulative fixed deposits.
Under Cumulative Fixed Deposits:
- The rate of Interest applicable is 7% to 8.5% p.a.
- The minimum deposit is Rs. 50,000.
- Tenure ranges from 12 months to 60 months.
- Addition rate of Interest for senior citizens
- The loan can be applied against this FD
- Premature withdrawal of FD can be done
- The Interest is compounded on a quarterly basis and paid at maturity.
Interest Rate of Cumulative FD
| Tenure | General Public Interest Rates p.a. | Senior Citizen Interest Rates p.a. |
| 12 months | 6.75% | 7.00% |
| 24 months | 7.00% | 7.25% |
| 36 months | 7.50% | 8.00% |
| 48 months | 7.50% | 8.00% |
| 60 months | 7.75% | 8.25% |
Under Non-Cumulative Fixed Deposits
- The rate of Interest applicable is 7.25% to 8.50 % pa.
- The minimum deposit is Rs. 50,000.
- Interest is paid on a monthly, quarterly, or yearly basis.
- Tenures can range from 2 to 5 years
- Additional Interest for senior citizens
- Loan facility available
- Premature withdrawal is available.
Interest Rates of Non-Cumulative Fixed Deposit
| Tenure | General Public Interest Rates p.a. | Senior Citizen Interest Rates p.a. |
| 24 months | 7.00% | 7.25% |
| 36 months | 7.50% | 8.00% |
| 48 months | 7.50% | 8.00% |
| 60 months | 7.75% | 8.25% |
Characteristics of Tamilnadu Govt FD Scheme
Safety: Government fixed deposits are considered safe as they are provided by the state government, and the principal amount is usually guaranteed.
Interest Rates: The interest rates on government fixed deposits are fixed at the time of investment. Rates may vary based on the tenure of the deposit. Senior Citizens will receive 0.25% higher Interest.
Tenure: The government fixed deposits have predefined tenures, and investors can choose a tenure based on their preference. However, the tenure varies from one to five years.
Tax Implications: The Interest earned on government fixed deposits may be subject to taxation. Investors should be aware of the tax implications and consider the applicable rules. The minimum amount to be invested should be Rs. 50,000.
Nomination Facility: Investors usually have the option to nominate a beneficiary for the fixed deposit. In the event of the investor's death, the nominee can claim the FD.
Renewal Options: Many government fixed deposits offer renewal options, allowing investors to reinvest the maturity amount for an additional term.
Premature Withdrawal: Premature withdrawal of the FF may be allowed under certain conditions, but there can be penalties or a reduction in interest rates.
Documentation: Investors need to complete the documentation, providing details such as name, address, nomination details, and the amount to be invested.
Issuance of Receipt: Upon investment, investors are typically issued a fixed deposit receipt or certificate, serving as proof of the investment.
Mode of Investment: Investors can usually invest in government fixed deposits through designated banks or financial institutions.
Documents Required for Tamil Nadu Govt FD Schemes
The following documents are required to open an FD account under Tamil Nadu Govt FD Schemes:
- Filled Application form with your signature
- Filled KYC Form with Signature
- PAN Card
- Aadhaar Card
- Bank Passbook Front Page or Canceled Cheque
- Two sets of signed 15G/ 15H forms.
The following documents are required to renew your existing FD account:
- PAN Card
- Filled Renewal Form with signature
- Original Deposit receipt with signature
What are the available tenure options for Tamil Nadu Government Fixed Deposits?
The tenure options may vary, and investors can typically choose from various periods such as one year, two years, three years, and so on.
How is the Interest on Tamil Nadu Government FDs calculated?
The interest calculation method may vary. It could be simple Interest or compounded Interest, depending on the terms of the specific FD scheme.
Are there any tax benefits associated with Tamil Nadu Government FDs?
Tax benefits, if any, will depend on the prevailing tax laws. Generally, the Interest earned on fixed deposits is taxable, and investors should be aware of the tax implications.
Can I withdraw my Tamil Nadu Government FD before maturity?
Premature withdrawal options are available, but they might be subject to penalties or a reduction in interest rates.
Is there a nomination facility for Tamil Nadu Government Fixed Deposits?
Generally, investors can nominate a beneficiary, and in case of the investor's death, the nominee can claim the FD.
Are the interest rates on Tamil Nadu Government FDs fixed or variable?
The interest rates are typically fixed at the time of investment. The rates may vary based on the tenure of the fixed deposit.
How secure are Tamil Nadu Government FDs?
Government fixed deposits are generally considered safe as they are provided by the state government. However, investors should review the safety ratings and terms before investing.