Tata Motors Fixed Deposit Plan

tata-nano2

Tata Motors recently announced its Fixed Deposit plan, which is open for subscription to Resident Indians, NRIs, HUFs and Registered Societies, among others.

The fixed deposit plan has generated quite a bit of excitement, as it gives a yield of 12.83% on its 3 year — Cumulative Deposit Plan. Remember, this is the yield and not the interest rate. The interest rate remains 11%, which is still pretty high for a fixed deposit.

I think the frenzy generated by the launch of Tata Nano — the cheapest car in the world has easily over-shadowed the credit downgrade of Tata Motors to B+ by S&P (second one since last December).

From FT:

“S&P cited deteriorating cashflow stemming from Tata’s $2.3bn acquisition last year of Ford’s Jaguar and Land Rover marques as among the reasons for the downgrade – the second by S&P since December.”

Tata Sons is the parent company of Tata Motors and is one of the oldest, biggest and most reputed Indian conglomerates. So it is difficult for most Indians to even consider the idea that Tata Motors will default on its debt — S&P or no S&P, and of course the recent crisis where large banks and insurers are stuck holding toxic / legacy — AAA paper — has raised a lot of questions on the credit rating agencies themselves.

Tata Motors Fixed Deposit Plan Schemes

Here are the two schemes that an investor can choose from:

Scheme A

Quarterly Income Plan

tata-motors-fixed-deposit-scheme-a

Scheme B

Cumulative Deposit Plan

tata-motors-fixed-deposit-scheme-b

Tata Motors Fixed Deposit Plan – For NRIs

NRIs can invest in the Fixed Deposit Plan if they deposit the amount from their NRO Account and this amount doesn’t represent an inward transfer from a NRE / FCNR (B) account. Interest will be deposited in this NRO Account and NRIs need to submit their Indian address while making the application.

Tax Deduction at Source

Tax will be deducted on source from the interest of this Fixed Deposit Plan according to the provisions of the Income Tax Act 1961 for residents and NRIs.

For NRIs — the tax will be deducted at source, as the current provisions of Income Tax Act 1961 doesn not allow interest exemption on interest earned from deposits with companies.

Subscription to Tata Motors Fixed Deposit Plan

You can subscribe to this plan through your broker.  ICICI Direct has a link to it where you can subscribe to it online. If your broker doesn’t have the facility to subscribe to this plan — then you can also submit the application form at select bank branches.

Tata Motors Contact Page

This site is not related to the Tata Motors FD in any way, and if you applied for the FD and haven’t received any acknowledgment, please go to the Tata Motors page for investors.

Link for Tata Motors Investors Page

On this page, there is a phone number that you can call, and an email address that you can use to write to them about your concerns. Please use those resources to get an answer to your question.

Image Source: Tata Nano Gallery

Disclosure: I have not applied to this fixed deposit plan at the time of writing.

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Update: Tata Motors Investor Relations link included at the end of the page.

94 thoughts on “Tata Motors Fixed Deposit Plan”

  1. I also want to apply for this Fixed deposit..
    how do I apply..below is my number help me out..

    chhaya

  2. sir

    would like to know the latest Fd rates, kindly provide the details
    and also how NRI can Invest and can they repatriate the same.

    whats the commission for the FD’s

    regards

    1. @Padmanabhan: Do you have a NRO account? That should be enough to get started. If not then you need to look at getting this first.

  3. sir
    i want to know this how much interest on fd nd how much comission on it

  4. Please tell what was the rate of interest on Tata Motor Fixed deposit on 24.4.09

  5. Sir I am interested in investing in TATA MOTORS fixed deposit scheme. So please tell weather this scheme is still available.

  6. I also want to apply for this Fixed deposit..
    how do I apply..below is my number help me out..

    Hemanshu.

  7. can i know the risk factor while investing in tata motor fixed deposit

  8. Sir,

    Ref : Fixed Deposit Certificate No 131880
    Sub: Correction of status as Shareholder whose Client Id is 10264691 under DP ID IN 302105 of Eureka Stock & Share Broking Services Ltd. and make necessary correction in ECS amount at the rate of interest as applicable to a Shareholder.

    We introduce ourselves as Business Associate of Karvy Stock Broking Ltd. Under code no 48107.
    We have canvassed “FIXED DEPOSIT” of Tata Motors on 31/03/2009 to Mr. Basudeb Das who is your shareholder of Tata Motors as given above.
    But we regret to inform that our client Mr. Basudeb Das has received a “FDR Certificate No. 131880” under category of “ PUBLIC” and received a Statement of ECS at the rate of 11% as applicable for “PUBLIC”. Whereas he has applied under category of “ SHAREHOLDER” and clearly ticked in shareholder category in the application form and necessary documents i,e stock holding statement of Eureka Stock & Sharebroking Services Ltd. attached therewith.
    Therefore we request you to correct the status of the Client as “SHAREHOLDER” and remit the differential amount of interest through ECS in his Bank with interest of @ 11.5% which is applicable for a Shareholder .

    Your early action in this regard is highly appreciated.

    Thanking you,

    Yours Faithfully,

    C M Mukherjee

    Partner
    Ace Financial Services
    (Business associate Code of Karvy 48107)
    Copy to 1) Tata Motrs
    2)Mr Basudeb Das

  9. Dear Sir /Madam,

    I am holding FDR No 94450 dated 04.03.09 in name of Pervin Rointon =
    Khokhri. of TATA MOTORS

    In your covering letter you have mentioned that I will get the interest =
    on 31.03.09 for the period 04..03.09 to 31.03.09 amounting Rs. 253 /-

    Please note that till today I have not received any interest form your =
    end.Kindly look in to the matter any reply me at your earliest.
    Awaiting your reply on above email id

    Regards,

    keki khokhri

  10. Sir I am interested in investing in TATA MOTORS fixed deposit scheme. Firstly please tell weather this scheme is still available. Secondly I am thinking of investing around 50 lakhs in this scheme. Can you guide me that I am not taking any risk by investing in TATA scheme.

    1. @Mir, There is a little risk in investing in this scheme as it is a FD from a corporate. If you are looking for something that is risk free or very little risk please invest in government securities or fixed deposits with SBI.

      @Keki,

      Please get in touch with Tata Motors for your query. This site is not related to them in any manner.

      This is the link you can use to post your query:

      http://ir.tatamotors.com/?CardID=18

      Click on Investor Query and fill out the form.

  11. Basil,

    The form does talk about premature withdrawal and says that it is allowed solely at the discretion of the company and that they will deduct the brokerage paid by the company at the time of deposit.

  12. i want to know the exit load of tata motors if we withdraw the amount in 3 months

  13. Sir,
    I heared that u have reduce the interest rate ? is it right ,if i want to invest some money in ur scheme with same intrest earlier is it possible pls. replly so i can invest my money in ur company or any other sceme.
    My Mobile no 9820046810

    1. They have not reduced the rate of interest to 7%. You can still get it at earlier rate, please check with your broker.

  14. Sir I am interested to invest few money in your scheme can I invest online or suggest me other ways for investment
    I am wating your suggestion.
    Thanks
    Vijay Nemade

    1. You can apply to the scheme by getting in touch with your broker only. This site or none other like this can help you in getting this scheme.

  15. S.B. Ram,

    The prospectus says that deposits from NRIs will only be accepted from NRO accounts and that too — only when they don’t represent a transfer from an NRE account.

    From the document:

    “Deposits would be accepted for a maximum period of 3 years provided that deposit shall be placed to the debit of NRO
    accounts only and amount deposited does not represent inward remittance or transfer from NRE/FCNR(B) accounts into a NRO account. Payment of interest as also the repayment of deposit shall be made only by credit to the NRO”

  16. Can NRI make the deposit from his NRE A/C and if so repatriation facility is available or not.

    Regards,
    S.B. RAM

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