A Guide To Investing In Higher Yielding Company Fixed Deposits
Company Fixed Deposits are just like regular FDs, and involve an investor investing a sum of money in a company and gaining attractive rates of interest on the investment. This kind of FD is also offered by banks and financial institutions. These deposits are a feasible form of investment for investors who seek higher returns on their investments. Company FDs are better than traditional Fixed Deposits mainly because of the higher returns, but carry more risk. Listed below are a few benefits of company Fixed Deposits.
The primary motive of investing in FDs for investors is returns. Hence it is likely that most investors would gravitate more towards company Fixed Deposits. The difference between returns offered by company FDs and bank FDs is almost 2.4%. High returns also mean you would receive more money and can put it to good use. It can help you pay your daily expenses and also fulfil your responsibilities.
Safety and Predictable Returns:
Almost all returns in company Fixed Deposits can be estimated and predicted. This makes investing in company Fixed Deposit a safe option. Company FDs are also free from market fluctuations. This makes them ideal for investors who seek predictable gains with better safety.
This means nominating a relative or a family member to receive the matured principle. Company FDs let the investor add a nominee to the account.
In this kind of investment, there is absolutely no TDS applicable, if the interest amount falls below Rs.5000.
Thus, from the points mentioned above, it can be noted that this investment option is a great one for those seeking better returns, safety, nomination facilities and tax benefits. However, as with any investment option, even with this option it is important to consider a few points before making the final decision.
What You Should Consider About Company FDs Before Going Ahead
Try to consider the following factors before going ahead with the investment decision.
1. Check the ratings: Numerous financial institutions have a range of ratings that display the safety of investing in their company. A company FD carries more risk than a regular FD so check the rating and pick one that is stable to be safe.
2. Reputation of company: Various companies have different reputations when it comes to repaying investors. It is important for you to evaluate the company’s performance and even take opinions from other investors about their experience of investing in the company.
3. Interest returns: Always go for a company after ensuring that the interest rates on FD offered by the company are favourable to you.
4. Savings: As with any other Fixed Deposit schemes, it is important to plan and calculate your savings before investing in fd.
5. Income: You should also get a clear understanding of your income before investing. This can help you decide how much of your income can be invested. You can check your income by viewing past bank statements, salary slips, and even pass book entries.
6. Tenor: For any FD, it is important for you to assess the tenor period. While some FDs let investors create a deposit for a short duration and provide quick returns, some have longer tenors and provide your investment better growth.
On the whole, company Fixed Deposits are a good option for those who seek higher returns. However, before making your final decision, carefully ensure you have considered the factors mentioned above. Start an FD account with Bajaj Finance by applying online and getting one of the most attractive rates of interest available.