Should You Shift To Company FD Schemes For Higher Interest
Company fixed deposits are like bank FDs, except they offer investors a more attractive rate of interest on the sum invested and are slightly riskier than bank FDs. You can invest in company FDs at a range of financial institutions. These fixed deposits are a feasible form of investment for those who seek higher returns while still keeping risk to a minimum. Company FDs are more feasible for an investor since they are higher in terms of profitability as compared to regular fixed deposits.
Here Are A Few Benefits of Company Fixed Deposits:
- Higher interest returns: The main goal of investing in a company fixed deposit is the propensity to gain from better interest rates. Hence it is likely that most investors would gravitate towards company fixed deposits. There is a rise of almost 2.4% in the interest offered between company FDs as compared to bank FDs. High returns mean you would gain more money as interest pay-out and put it to good use—whether you plan a different investment or want to buy an asset.
- The returns are safe and risk-free: The returns that come from company fixed deposits are almost always predictable, thus assuring you more security and certainty, and making this investment option safe. Company FDs are also free from market fluctuations. This makes them ideal for investors who seek predictable gains with better safety.
- Nomination facility: Company FDs allow you to nominate a relative or a family member to receive the total amount (including your principal investment and the interest) at maturity. This is very beneficial to investors.
- Tax benefits: In this kind of investment, there is absolutely no TDS if the interest amount falls below Rs.5000.
Investing in a company fixed deposit is a great option for those seeking better returns, safety, nomination facilities and tax benefits. However, as with any investment option, it is important to consider a few points before making the final decision.
Factors To Consider When Investing In Company FDs:
- Review ratings: Financial institutions have a set of safety ratings that help you judge the reliability and credibility of your FD. A company that is rated AAA is perfectly secure so check this before you create an FD account.
- Check company reputation and history: Each company has its own unique history, which helps form the company’s reputation. You can use these details to take the final call of whether you want to invest in that company FD or not.
- Focus on interest returns: Always go for a company FD only after ensuring that the interest rates offered by the company are favourable to you. Use a FD calculator to see your returns before signing up.
- Plan your savings: As with any other fixed deposit scheme, it is important to plan and calculate your savings before investing.
- Calculate your income: You should also get a clear figure about your income to decide how much of your income can be invested. You can check your income by viewing past bank statements and salary slips.
- Choose your tenor wisely: For any fixed deposit investment, it is important for you to scan the tenor. While some FDs have a lower tenor and provide quick returns, some have high tenors and provide your investment better growth.
On the whole company fixed deposits are a good option for those who seek higher returns. Bajaj Finance can further help you make the correct investment decision when it comes to FDs. To see the benefits of creating an FD account with Bajaj Finance.