Best avenues to invest in 2017 to get higher returns

The last quarter of 2016 saw one of the most landmark decision taken by an incumbent Prime Minister in the country’s 69-year history since its freedom. PM Narendra Modi, with inputs from the Finance Ministry, brought into effect the demonetisation of Rs.500 and Rs.1,000 notes. This move, although took the country into a near meltdown, has somewhat appeared to stabilise the economy for the long haul.

However, one of the prime effects of demonetisation was that avenues that were deemed profitable for investors lost their charm. In this article, we will talk about a few instruments you can invest in to get better returns for your money.


  • Post Office Recurring Deposit

The age-old Indian post office has underwent a major paradigm shift over the last few years in a number of ways. Of the many, one of the things that stand out is the introduction of deposit schemes. These schemes offer good returns for investors and is almost matchable with fixed deposits of similar terms. At the time of writing this article, post office deposits offer 7.3% returns, which compounds quarterly, for a 5-year period.

For instance, a regular Rs.100 investment will yield a return of Rs.7,250.50 returns once the scheme matures.

  • Public Provident Fund (PPF)

Public Provident Funds (PPFs) has long been one of the most preferred investment avenues for a vast majority of risk-averse working professionals. These funds mature after a 15-year period and offers a opportunity to renew for 5 years every time from there on. Besides, PPF is also eligible for tax deduction under Section 80C of the Income Tax Act.

  • Sukanya Samriddhi Account (SSA)

SSA is basically available for parents of a girl child, which enables them to invest so as to build a corpus to fund the education and other things relating to the girl. This account requires a minimum of Rs.1,000 to be opened and the guardian can add multiples of Rs.100 every time they want to add to the account. The account has an upper limit though, meaning parents can only invest a maximum of Rs.1.5 lakhs per calendar year. A benefit of this account is that it is available for tax deduction while the returns non-taxable. Also, the maximum interest such accounts offer stands at 8.5%

  • National Savings Certificate

National Savings Certificate (NSC) is yet another save avenue that offers guaranteed returns. Currently, the returns offered stands at 8% for a five year term. An account can be opened for as less as Rs.100 while there is no upper limit to the amount that can be invested. An advantage of this fund is that you can use it as collateral for any loans.

These are some of the best investment options you can invest in if you are tired of fixed deposits and their falling interest rates.



Get the best out of your FDs by using laddering strategy

By investing in fixed deposits, you can earn attractive returns on your savings. A fixed deposit account is a type of savings instrument wherein you can invest for a fixed tenure and get good returns at maturity. It pays you a fixed rate of interest on your savings. Normally, a fixed deposit cannot be withdrawn before its maturity date. However, by giving prior notification to banks, you can withdraw your deposits.

fixed-deposit-account-250x250Since fixed deposits are offered for different tenures at different rates, you can choose to invest for a particular tenure, either short or long, based on your convenience and get returns accordingly. However, given that interest is expected to fall by around 100 basis point over the course of the year, it is advisable that you invest your savings in long term fixed deposits to avoid risk. Or else, you can take the help of ‘laddering strategy’ to minimize your investment risks and earn attractive returns.

How laddering strategy works?

Soon, the Reserve Bank of India is expected to announce a rate cut on its lending rates. Once, the central bank announces its cut on lending rates, banks may lower their interest rates on fixed deposits. So, keeping this scenario in consideration, it would be advisable for those, who do not want to lock their savings in long term fixed deposits, to embrace the laddering strategy to get the best out of their fixed deposits. A laddering strategy is a kind of investment strategy which enables you to invest in several securities with different maturities. It protects investors from investments risks by locking interest rates at a time. The strategy mostly applies to bonds and certificates of deposit.


The laddering strategy is simple and it helps you break your fixed deposits into multiple fixed deposits for different tenures as per requirements. You don’t have to invest your sum in one single fixed deposit. For example, if you want to invest Rs.1 lakh in fixed deposit, the laddering strategy will help you break that amount equally into multiple fixed deposits for tenures such as 1 year, 2 years, 3 years, 4 years and 5 years as per you choice. And at the end of 1 year, you can reinvest your returns in a fixed deposit for any chosen period, if you don’t need funds. Likewise, at the end of second year, you can again re-invest the amount in a fixed deposit for further five years. Thus, every year you will have one fixed deposit maturing. You can either take out your maturity funds or reinvest it for a longer tenure at attractive rates of interest.

Individuals who need frequent and immediate access to cash, they can use this laddering strategy while investing in for short term fixed deposits. The main idea behind this strategy is to help you get the best out of your investments. If you need cash, you can use your maturity funds or else you can reinvest that amount and earn more returns.

In case of regular long term fixed deposits, if you withdraw your funds prematurely, you may end up losing your entire interest amount. Again, if you invest in short term fixed deposits, the return is very nominal. So, considering all these aspects, the laddering strategy is best suitable for those who need funds at regular and short intervals. If you don’t need fund at short intervals, then the best idea would be to invest your savings in long term fixed deposits and earn maximum returns.

What will happen if a Company Fixed Deposit holder dies!

Fixed Deposits


Fixed deposits are a much sought-after investment option in India, especially amongst the retired citizens. It is, therefore, pertinent to ensure that the family members of the investor should be well versed with the claim process to avoid running from pillar to post in the event of the death of the deposit holder.

FD mode of operation

Fixed deposits can be held in different modes which need to be examined for a proper understanding of the claim process. The different modes are listed below:

  • Option 1 (joint holding)

If the first holder dies, the surviving holder has to inform the company and submit the death certificate. Consequently, the company will delete the name of the deceased. The surviving person will, therefore, receive the maturity proceeds.

  • Option 2 (joint holding)

If the first holder dies, the survivor can claim the deposit on maturity. If the second holder dies, the first holder can suggest another person of his or her choice.

  • Option 3 (joint holding)

The deposit will be paid to the first holder when both the depositors sign on the FDR. However, in case of death of one of the depositors, the surviving depositor will receive the proceeds.

  • Option 4 (single holding)

If the deposit is held in a single name while one or more persons are nominated, the maturity proceeds will be paid to the nominees as trustees.

  • Option 5 (single holding sans nomination)

If the deposit holder dies, the survivors will have to produce a Will or a Succession Certificate to claim the proceeds.

Several companies in India offer attractive fixed deposit schemes such as ICICI Home Finance Company.

ICICI HFC Fixed Deposit

ICICI Home Finance Company Limited (ICICI HFC), one of the major leaders in the Indian mortgage finance sector, is promoted by ICICI Bank Limited, the second largest bank in the country. Fixed deposits of ICICI Home Finance Company Ltd. has a credit rating of CARE AAA. HFC’s public fixed deposit schemes are governed by regulations of the National Housing Bank.


Features and benefits

  • Deposit tenure: 12 months (minimum) to 60 months (maximum)
  • Maximum deposit amount is Rs. 50 million
    • Annual/cumulative income plan- minimum Rs. 10,000
    • Monthly income plan- minimum Rs. 20,000
    • Quarterly income plan- minimum Rs. 40,000
  • Interest: Monthly, quarterly, annual and compounded annually
  • Nomination facility: Available
  • Premature withdrawal: Allowed only after first 3 months
  • Tax: No tax deduction at source on interest
  • Eligible Depositors
    • Resident Indians
    • NRIs
    • Trusts and Foundations
    • Co-operative Societies
    • Firms
    • Companies
    • Association of Persons (AOPs)
    • Hindu Undivided Family (HUFs)
  • Documentation Required
    • Deposit Application form
    • Form 15H
    • Form 15G
    • ECS Mandate Form
    • Deposit Amount Cheque/DD
    • KYC
    • For individuals, documents required are photo id proof, address proof and age proof for senior citizen deposits.
    • For other entities, documents required are Certificate of Registration, Board/Managing Body Resolution and so forth
  • Mobilization mode: Direct and brokers
  • Interest rates offered for deposits greater or equal to Rs. 1 crore under different plans are listed below:
Period (Months) Cumulative Income Plan Quarterly Income Plan Monthly Income Plan
12 months 8.50% 8.25% 8.20%
15 months 8.90% 8.60% 8.55%
20 months 8.90% 8.60% 8.55%
30 months 9% 8.70% 8.65%
35 months 9% 8.70% 8.65%
40 months 8.75% 8.50% 8.40%
60 months 8.50% 8.25% 8.20%
  • ICICI HFC’s fixed deposits are low risk investment option with assured long-term returns.
  • Deposits can be made in joint names with three persons (maximum). The interest on deposits will, however, be paid to the first depositor. Deposits in the name of a minor will be accepted if he or she is represented by his guardian.
  • For renewals, fixed deposit can be minimum of Rs. 5,000 while any additional amount will be in multiples of Rs. 1. Fixed deposit applications can be accepted at ICICI HFC retail offices.
  • Interest earned up to Rs. 5,000.00 in a year is tax exempted. Also, deposits by trusts fall in the category of Specified Investment of the IT Act 1961.
  • Loan facility is available only to individuals (except minors and NRIs) HUFs and corporates after the first three months for up to 75% of the deposit amount. Interest on such loans will be 2% above the deposit rate.