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Fixed deposit will be the first thing which comes to your mind when you think about the investment. Most of the people will have fixed deposits in their bank account. But it is not known to the people that by fixed deposit in the companies give good returns. About 1 to 3% of the interest is high in company fixed deposit comparing the interest offered by the banks. If you want to know more about the fixed deposit banks are providing the information, have a peek at this website.
Company fixed deposit
It is also called as the company term deposit is provided by the housing finance companies, finance companies and by NBFCs. By investing your money in the company fixed deposits your money will get multiplied. The rating of this fixed deposit is due to the credibility of ICRA, CARE, CRISIL, etc., which are the rating agencies.
Things to know before investing in the company fixed deposit
1) High-interest rates
The interest given by the company fixed deposit is one of the best things to be considered. It provides high-interest rate comparing to the interest rates issued by the banks.
2) Options for the payment of interest
A number of options is provided by the company fixed deposit for the payment of the interests such as monthly and quarterly, half-yearly and yearly interest depending upon their needs.
3) Credit ratings
ICRA and CRISIL are the autonomous agencies which give the credit to all the company fixed deposits. Thereby the best-fixed deposits can be selected by the customers based on the ratings.
4) Unattractive post-tax return
Because of the high interest in the company fixed deposit about 30% of tax bracket, interest obtained is subjected to the tax and hence you are free from the tax benefits.
5) Risky
Bank gives the guarantee for the deposit whereas in the company fixed deposit you should be aware of the risk before investing in this scheme. However, measurement can be taken to avoid this type of risk by opting to the well-rated company fixed deposit.
6) Risk involved
Default risk by the withdrawal of the premature deposit amount leads to the cash crunch in the company. The second risk is I you have invested in the wrong company where you will not get the good returns. To avoid this risk you have to think before the investment.
7) Penalty to premature withdrawal
For the premature withdrawal penalty is charged to overcome the cash crunch for the company.
8) Verify the track record of the company
Before the investment, you have to select the company by verifying the company’s track record to know their financial status.
9) Have a nominee
It is beneficial to the investors in the case of their death and the deposit will be given to the nominee.
10) Understand the outlines
Before filling the application you go through the terms and conditions to get clear about your fixed deposit.