Fixed Deposit
Fixed Deposit aka term deposit is an instrument by which one can deposit his/her savings for a prescribed period of time with a bank. When the period of deposit elapses, the depositor is entitled to the interest on the deposited amount. In some cases, the rate of interest on fixed deposits can be as high as 9.5%!
The Bankers View
For banks, fixed deposits (or term deposits) represent a loan arrangement. In simple terms, the money deposited through such investments shall earn a said amount as interest, as per the existing norms and guidelines as set by the banking regulatory authority. The rate of interest on your fixed deposit is determined by many factors such as the location of deposit, the duration for which the amount is deposited as also the currency involved for making the deposit.Types of Companies offering Fixed Deposits
- Financial Institutions
- Non-Banking Finance Companies (NBFCs).
- Manufacturing Companies
- Housing Finance Companies
- Government Companies
Features and Benefits
- Company Fixed Deposits offer comparatively higher returns than banks.
- Choose the best tenure for you from a wide range as per your convenience.
You can choose how frequently you want to receive your interest payments:
- Maturity
- Yearly
- Half-yearly
- Quarterly
- Monthly
- Company Fixed Deposits are non transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused.
- Premature encashment of deposit is available any time subject to payment of prescribed penalty.
- Diversify Risk- The deposits should be spread over a large number of companies engaged in different industries. This way, youll be able to diversify your risk among various industries/companies.
- Wide Choices- Many companies operating in the Company Deposit market. This will help you decide whether to renew or reshuffle the deposit.
- Attractive rates as applicable from time to time.