Investing in a company fixed deposit involves depositing a certain amount at a prescribed interest rate for a fixed period of time. A Non-Banking Financial Institution (NBFI) or a similar institution offers a fixed-rate investment. In addition to DHFL, Mahindra Finance Ltd.,Bajaj Finserv, LIC Housing Finance, ICICI Home Finance, etc., there are other examples.
The bank FD is similar to other investment instruments where the investor deposits a fixed amount of funds at a fixed interest rate for a fixed period. Several public-sector and private-sector financial institutions offer these FDs, including UBI, SBI, PNB, Axis Bank, IndusInd Bank, and IOB.
In order to determine which type of FD is most suitable for an investor, FD rates in India must be considered. Bank FDs have interest rates ranging from 4% to 7.25%, whereas company FDs have interest rates ranging from 6% to 9%. Choosing company fixed deposits may seem lucrative due to their higher interest rates. We want to warn you about certain factors you should consider before investing in company FDs.
Things To Consider
- Returns after taxes can be high and unattractive.
- You should be concerned about the security of your money
- There is a risk of the company being in a cash crunch situation
- Investors in equity are given more privileges than those in fixed income
Fixed Deposit are One of the Safest Investment Options.
Fix deposits offer higher returns without any risk, so they are a good choice if you want higher returns. There are a lot of banks and NBFCs offering higher interest rates on Fixed Deposits nowadays. However, before investing money in any FD scheme, you should compare them based on these parameters.
- Offered Interest Rate
- Tenor
- Rating
- Medium of Investment
- Liquidity
As a personal recommendation, we suggest you consider Bajaj Finserv’s Fixed Deposit Scheme, as they offer higher FD rates in India and have the most stable rating from CRISIL and ICRA. Senior citizens are also eligible for a 0.25% additional interest rate.
When you are looking to grow your capital seamlessly, you must find a good bank. Banks that offer a competitive interest rate, convenient withdrawals, easy account opening, attractive features, as well as other value-added services are considered good.
Interest rates are the most important factor when choosing an FD plan, with small finance banks offering the best plans, followed by private and government commercial banks. The interest rates that many small finance banks provide range from 2.50% to 7%, while those offered by private banks range from 2.50% to 6%. There is also an interest rate range of 2.50% to 5.30% offered by government banks.
Despite the higher FD rates in India offered by small finance banks, these rates cannot be found everywhere. The fact that they have a limited or low depositor base might also pose liquidity risks. The best FD plan offered by a housing finance company would be a prudent choice. If you want high returns like small banks, you can evaluate using an online FD calculator.
As high as 9.13% could be the annualized yield on housing finance FDs. A reputed housing finance company has a branch in each state of India and provides doorstep services to its customers. Therefore, opening an FD account does not require leaving your room. PNB Housing Finance is another name worth mentioning. Plenty of consumers have a portion of their capital invested in cumulative deposits and a portion in non-cumulative deposits for quicker capital growth.
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