Hawkins Cookers Fixed Deposit – A Good Fixed Income Opportunity
Most of us have a chunk of our investments in financial assets in Bank Fixed Deposits. However, it’s a well known fact that tax-adjusted returns from Bank Fixed Deposits fail to beat the inflation or may actually give negative real returns after adjusting for tax and inflation. Hawkins Cookers, the company which is a household name, courtesy of its iconic Hawkins cookers and cookware, has come out with an attractive Fixed Deposit Scheme which could help you beat Bank FD returns by a significant margin. Read below to know the details and our view.
Details of the Fixed Deposit Scheme
Resident Individuals & Domestic Companies can apply for the cumulative/ non-cumulative scheme available for tenors ranging from 12 months to 36 months while interest rate ranges from 11.25% to 11.75% per annum.
| Tenor (months) | Interest rate per annum |
| 12 | 11.25% |
| 24 | 11.50% |
| 36 | 11.75% |
Source – Company
| Scheme Options | The above scheme is available in cumulative (interest compounded monthly) & non-cumulative (interest payment semi-annually) options |
| Minimum Deposit Amount | Rs. 25,000 for both scheme options. Additional deposits accepted in multiples of Rs. 1,000 |
| Nature of Deposit | Unsecured |
| Eligibility | Resident Individuals & Domestic Companies |
| Withdrawal | Pre-mature withdrawal is not permitted. However, after 6 months of date of Deposit, the company at its sole discretion may permit pre-mature withdrawal |
| Credit Rating | [ICRA] MAA (Stable) |
| Tax Treatment | Taxes will be applicable similar to Bank FDs. TDS will be deducted. |
| Nominee Facility | Available |
| Joint Deposits | They can be opened with maximum 3 joint names |
| Period | Effective 15th Sep, 2015 |
Source – Company
How to Apply for the FD?
The application procedure is very simple – An application form can be downloaded from the company’s website and submitted to the registered office of the company alongwithcheque/DD.
GreenEdge Wealth Services’ View – Should You Invest in Hawkins Cookers’ FD?
Hawkins’ FDs offer superior fixed returns ranging from 11.25% to 11.75% vs. Govt. Bonds & Bank FDs offering <=8% returns over similar tenors as highlighted in the below exhibit.
Fixed Returns Comparision – Govt. Bonds vs. Bank FD vs. Hawkins FD
|
|
Govt. Bonds | Bank FDs* | Hawkins FD |
| 12 months | 7.4% | 7.25% – 7.75% | 11.25% |
| 24 months | 7.7% | 7.65% – 8% | 11.50% |
| 36 months | 7.8% | 7.75% – 8% | 11.75% |
*Bank FD rates considered from SBI, HDFC Bank & ICICI Bank
Hawkins clearly offers at least 3.25% higher returns vs. Bank FDs &Govt Bonds. Although these are unsecured fixed deposits, the management integrity and the company’s past track record adds a lot of safety to ones investment.
We believe that investors who are willing to lock-in their money for 1/2/3 years can allocate some part of their fixed income portfolio to Hawkins’ FDs as it offers superior fixed returns with high credit quality and low risk.