If you would like to supplement your regular income, Corporate Fixed Deposits are a wonderful option for you to go. Corporate FDs tend to carry certain risk too, so tread with caution while putting your hard earned money into such schemes. India’s Best Free On-call Corporate Fixed Deposit Investment Advisory warns that you must go for Corporate FDs only if you can bear a certain amount of risk.
The interest rates offered by Corporate FDs are higher than Bank FDs. Organizations require money for expansion and funding projects so they raise money through Corporate FDs.
What is Corporate Deposit?
A Corporate Fixed Deposit (FD) is an investment for a certain amount of time in a company at a prescribed rate of interest. India’s Best Free Online Corporate Fixed Deposit Investment Financial Advisory informs you that Corporate FDs aren’t regulated by the Reserve Bank of India (RBI). Therefore, if the company doesn’t offer you returns on time, there is not much you can do about it.
Features of Corporate Fixed Deposits
The term of Company Fixed Deposits usually range from 12 months to 5 years in general. The minimum is one year while the maximum is five years.
- Types of company FD
Cumulative schemes let the interest accumulate with the principle and earn higher returns while Non Cumulative schemes pay off the earned interest on a regular basis so that the interest will not get acquired on principle.
- Company ratings
Certain institutes rate companies based on Net Owned Fund (NOF) and certain slabs. Based on the rating, you have to decide which company to invest your surplus money in.
Merits of Corporate Fixed Deposit
- Interest rates are higher than their bank counterparts
Interest rates in Corporate Fixed Deposits are higher than interest rates in Bank Fixed Deposits. This means you can earn higher returns here.
- Encourages you to save
Fixed Deposits, both Corporate FDs and Bank FDs, encourage investors to save more money for the future. They also offer good returns.
- Credit ratings
Corporate FDs are rated by independent rating agencies. They access the credit worthiness of the issuing companies. This isn’t applicable to Bank FDs.
- No need to invest too much in Corporate FDs
You don’t have to worry about putting in a hefty amount while opening a fixed deposit account with a company. Commence with as little as Rs 25,000.
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