Investment Tips: Fixed Deposit (FD) is probably the best investment option in the country. But apart from FD, there are some options which can give you much more returns than that. One of these is investing in corporate or company FDs. You will get 5 to 6% interest on investing in the bank. On the other hand, you can earn much more by investing in corporate FDs. Interest is available from 7.5 to 8 on one-year corporate FD and 8 to 9 percent on five-year deposits. However, this option is more risky than FD.
What are Corporate FDs
Companies work to raise capital for their needs. Companies take capital from the investor for a fixed period which is called Corporate FD. Companies ask investors to invest through advertisements. To attract investors, companies pay more interest on this FD than banks and other finance companies. QBecause, these companies have the right to take deposits under the Companies Act. Corporate FDs of companies have higher interest rates, so it is better to invest in them.
The biggest reason why bank FDs are popular is that it is considered the safest for investment. Strict rules of Reserve Bank are followed in bank FDs. In case the bank becomes insolvent, the FD amount up to Rs.1 lakh will be covered under Deposit Insurance and Credit Guarantee Corporation even in such a situation.
Corporate Fixed Deposits, on the other hand, do not have this type of security. But that does not mean that your investment is risky. Whenever you invest in a corporate FD of a company, first check the credit rating of that company.
If you are thinking of taking a corporate FD, then these things should be kept in mind:-
- If you want to take risk then opt for Corporate FD
- Invest only in companies with high credit rating
- If companies offering FDs with AAA or AA ratings Before investing in corporate FDs, see the 10-20 years record of that company.
- Invest in deposits of the same companies Those who are making profits.
- What are the risks associated with high interest rates should also be considered.
(Investment advice is not being given by ABP News here in any scheme. The information given here is for informational purpose only. Take expert advice before depositing money in any scheme) strong>