Company Fixed deposits earn a fixed rate of return over a period of time. Financial institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by the Companies Act under Section 58A. These deposits are unsecured, and hence incase of any default by the company, the investor cannot sell the company to recover his capital, thus making it a risky option of investment. Company Fixed Deposits are adequate for regular income with the option to receive monthly, quarterly, half-yearly, and annual interest income. Moreover, the interest rates offered are higher than banks. Performance of the companies should be reviewed at maturity. This helps in deciding whether the deposit should be renewed or not. One should also keep track of these companies by checking their Balance Sheet, Share prices
The Fixed Deposit schemes are offered by
Manufacturing Companies
Government Companies
NBFC’s/ Housing Finance Companies NBFC`s that earns a fixed rate of return over a period of time. The return are usually higher than the Bank`s FD, therefore these are considered a bit risky also i.e., the investor cannot sell the documents to recover his invested amount even if the company defaults as there are no assets backing them up.
Credit rating of the company plays the significant role in Investor`s decision. Opt for a company with AA or AAA rating, as company rated below could be risky.
It offers the potential to earn compounding interest on your money by reinvesting the principal amount along with the interest earned. In terms of flexibility you can choose the tenure ranging from 1 to 7 year and opt for the interest frequency Content Flash agency as per your requirement; most issuer offer monthly, quarterly, bi annual, or annual cumulative deposit.