Overview of Mahindra Finance Fixed Deposit

About Mahindra Finance Fixed Deposit

Mahindra Finance was established twenty years ago with the aim of empowering the rural and the semi-urban population of the country. The company still deals in a wide range of financial products and services meant exclusively for the rural and semi-urban sectors. Mahindra Finance has an extremely focused aim of catering to the agriculture related finances for the farmers of India. Apart from this, housing finance, personalized finance for vehicles as well as for small business needs.

India ratings and Brickwork ratings have rated Mahindra Finance, ‘AAA’ and MIBL granted the company, “Broker of the year” award at the 18th Asia Insurance Awards. Mahindra Finance believes in empowering people, fostering rural prosperity and increase business efficiency. With headquarters in Mumbai, the net worth of Mahindra Finance is around 16.5 billion dollars. The company has a host of services in sectors other than the banking domain too. Tractors, utility vehicles, consulting services, defence, energy, logistics, real estate and steel are some of those.

Mahindra Finance Fixed Deposits

Mahindra Finance accepts funds maintained in accounts for fixed terms. These fixed deposits are offered at attractive rates and varying tenors. This gives investors a safe and flexible savings mechanism to channelize surplus funds so as to maximise returns while maintaining liquidity. As an ‘AAA’ rated company, the company is a safe option to earn returns at rates relatively higher than those offered by banking institutions. These deposits also offer a number of value-added benefits such as renewals, nominations, cumulative and non-cumulative options and special rates to employees.

Can I open a Fixed Deposit with Mahindra Finance?

All resident individuals, companies, NRIs, partnership firms, trusts and foundations, HUFs, family trust, charitable trust, sole proprietorships, clubs, associations and societies are eligible to open a fixed deposit account with Mahindra Finance. The documentation required for each entity is slightly different.

What are the different Fixed Deposit schemes offered by Mahindra Finance?

The fixed deposit schemes offered by Mahindra Finance are broadly divided into just two categories, namely Cumulative and Non-Cumulative. Cumulative deposits are the FDs for which interest is credited to the deposit holder’s account only when the deposit has reached maturity. Non-cumulative FDs on the other hand, have their corresponding interests credited back either quarterly or half-yearly.

What is the minimum amount that is required to open a Fixed Deposit with Mahindra Finance?

The minimum amount required to open a Mahindra Finance fixed deposit is dependent on the type of deposit that you want to go for. For cumulative deposits, the minimum amount for opening a fixed deposit account is ₹ 5000 whereas for non-cumulative deposits, the required minimum amount is ₹ 25, 000 half-yearly and ₹ 50, 000 quarterly, respectively.

What is the maximum amount acceptable for fixed deposit opening with Mahindra Finance?

There is no maximum amount limit of the fixed deposit accounts that can be opened with Mahindra Finance.

What are the minimum and maximum deposit periods applicable on Fixed Deposits of Mahindra Finance?

Mahindra Finance offers fixed deposits that can be availed for a period between 12 months and 60 months. There are no short term fixed deposit schemes like those for a few weeks or months, available with Mahindra Finance. Also, the rate of interest on each of these deposit periods varies from 9% to 11.13% for cumulative deposits and from 8.4% to 9% for non-cumulative deposits.

What is the exact process of Fixed Deposit account opening with Mahindra Finance?

Fixed Deposit accounts with Mahindra Finance can be opened online from the comforts of your home or directly by visiting any of the bank branches. An online form needs to be filled for online application while a physical application form needs to be filled in case you visit the bank branch.

What are the rates of interest offered by Mahindra Finance on its fixed deposit schemes?

Different deposit tenures fetch different rates of interest. Also, the rates are different for cumulative and non-cumulative deposits. Cumulative fixed deposits offer a comparatively higher rate of interest that the non-cumulative deposits varying between 9% and 9.25%.

Are tax-saver Fixed Deposits part of the Mahindra Finance portfolio?

Fixed Deposits with a locking period of 5 years or more are subject to waived-off income tax under section 80C of the Income Tax Act.

Are Mahindra Finance Fixed Deposits taxable under the Income Tax Act?

Yes. Mahindra Finance Fixed Deposits are taxable and are essentially split up into two groups. First is those for which the deposit holder has furnished his/her PAN number and the other is for which the deposit holder has not furnished his/her PAN number. In case the interest on the FD is equal to or more than ₹ 10000 in a year, income tax at 10% is deducted. However, if the interest received in a year is more than ₹ 10000 and the PAN number has not been provided then a tax of 20% on the interest received is levied.

What are the key features of Fixed Deposits by Mahindra Finance?

Some of the main features of Mahindra Finance fixed deposits are listed here:

• Crisil rating of FAAA which signifies a high safety level
• Options of cumulative as well as non-cumulative deposit accounts
• Additional 0.25% over and above the regular rate, for Senior Citizens
• Mahindra group employees and their relatives get an additional 0.35% interest rate over and above the actual interest rate

Can a loan be availed from Mahindra Finance against a Fixed Deposit?

Yes. Loans of up to 75% of the fixed deposit amount can be granted to the customer. This loan is applicable to those who have a running fixed deposit account with Mahindra Finance for more than 3 months. However, the loan sanction is solely on discretion of the bank.

Are special rates offered to senior citizens on Mahindra Finance Fixed Deposits?

Yes. Special and higher rates which are around 0.25% higher than the regular rates are offered to senior citizens who hold a fixed deposit with Mahindra Finance.

Does Mahindra Finance offer credit cards against a Fixed Deposit with the bank?

No. Currently, credit cards from Mahindra Finance are not available.

Does Mahindra Finance offer Fixed Deposit facility for NRIs?

Yes, Mahindra Finance offers a Fixed Deposit facility to NRIs on a non-repatriation basis. The interest earned cannot be sent back to the country of residence of the NRI.

What kind of NRI deposits are accepted by Mahindra Finance?

Mahindra Finance accepts only those NRI deposits made in Indian Rupees through Non Resident Ordinary (NRO) accounts in India. Funds transferred from Non Resident External (NRE) accounts or Foreign Currency Non Resident (Bank) [FCNR (B)] accounts are not accepted by Mahindra Finance.

Are NRI deposits through inward remittances from overseas permitted?

No, NRI deposits through inward remittances from overseas are not accepted by Mahindra Finance.

How does Mahindra Finance credit the interest in case of NRI Fixed Deposits?

The interest is credited only to the NRO bank account of the NRI. It will not be credited to any other account.

Can a loan be availed from Mahindra Finance against a NRI Fixed Deposit?

No, Mahindra Finance does not sanction loans against a NRI Fixed Deposit.

Does Mahindra Finance allow for premature withdrawals of deposits?

Yes, Mahindra Finance allows premature withdrawal of deposits based on certain conditions. Premature withdrawal of deposits are not permitted within the first three months of the deposit or the renewal period of deposit. Premature withdrawal is allowed after three months but a penalty might be imposed by Mahindra Finance depending on the withdrawal and the terms and conditions of the company.

When can premature withdrawals be made?

In case of non-cumulative quarterly accounts premature withdrawals are not allowed from the 20th till the last date in June, September, December and March due to maintenance of quarterly interest payment accounts.

In case of non-cumulative half yearly accounts premature withdrawals are not permitted during the last ten days of September and March due to maintenance of half yearly interest payment accounts.

Premature withdrawals are not allowed from March 20th to April 1st every year due to annual accounts maintenance. All other occasions are fine for premature withdrawals to be made.