Investors keep looking for investment options offering a higher rate of interest. The company fixed deposits or Corporate deposits are popular investment options yielding a fixed interest rate. The returns in company deposits are higher than other competitive fixed return investments.
As per the requirements of the Companies Act of 2013, Housing and Non-Banking Financial Companies (NBFCs) may issue company fixed deposits. In addition, several manufacturers also offer fixed deposits to the public with a competitive rate of interest.
The Company fixed deposits are governed by standard rules, but the features can change. Here are a few key distinctions between Company fixed deposit schemes of various companies.
First, different deposit schemes may have requirements of different minimum deposit amounts. The minimum investment amount for some Company fixed deposits may be higher than usual, but they may give a higher rate of interest for a certain term.
Secondly, some Company fixed deposits may offer extra incentives if you renew your investments with them. Thirdly, different deposits will have different Company fixed deposit ratings. Some of them might have ratings of A, AA, or even AAA.
However, keep in mind that ratings could alter over time and could not be consistent during the tenure. Finally, select between cumulative or con-cumulative fixed-rate deposits (where interest is due when the deposit matures) (where interest may be payable at monthly, quarterly, half-yearly or annual basis).
Stick with well-known companies like HDFC Limited and HUDCO, among other well-known and expertly run businesses.
Stagger your investment over different time frame by investing some amount in 1-year, 3-year and the balance in 5-year deposits rather than locking in the entire lump payment for a fixed period of time.