At a time when fixed deposits schemes of the bank are struggling to make their space in the investors' portfolio, Tata Motors fixed deposit scheme has brought funds worth Rs 2,000 crore in just four and a half months.

The company got the largest amount of subscription before April 15th when it was offering 11% interest for a minimum subscription of Rs 20,000 with a maturity period of three years. The yield 11% interest compounded quarterly comes out to be 12.83% when the deposit tenure ends. Moreover the scheme offers additional 50 basis points to senior citizens employees and shareholders in Tata Motors.

The CEO of Bajaj Capital, Anil Chopra said that the yield of 12.38% on Tata's scheme was attractive for investors in comparison to the fixed deposits offered by the banks. Investors had surplus cash and since other asset classes are not doing well, the company got good response from investors.

Although the cumulative yield from the deposit scheme has now dropped to 11.38% but yet the company is not bothered because the maximum amount that it can raise under the deposit scheme is Rs 2,700 crore.

Further fixed deposits of the company with the maturity of one year and two years are being offered at an interest rate of 10% and 10.5% respectively. The cumulative yield for one year deposit work out to be 10.38% while for a two years deposit, the yield would be 11.52%.

Presently there are over 35 companies' fixed deposit schemes in the market. Although companies have raised decent amount of money through these deposits but investors are still considering banks deposits safe due to the volatility in the market.

A distributor said, "Banks are currently offering 8 to 8.5 percent, but many investors don't want to compromise on safety. Corporate deposits are unsecured and, therefore, more risky compared to bank deposits."

Meanwhile Tata Motors is also planning to issue non-convertible debentures to banks and financial institutions on the private placement basis.

Earlier this year another company in Tata group, Tata Capital floated a retail non-convertible debenture issue that was subscribed five times.