Fixed deposits are financial instruments that involve a safe investment for a desired tenure with the intention of earning profits at a fixed rate of interest.
Most investors opt for FDs as they offer significant returns while giving them the liberty to choose the tenure and payout frequency for themselves.
Bank Fixed Deposits Versus Company Fixed Deposits
Investors can either opt for a bank FD or a company FD. Most people opt for bank FDs considering them to be the safer one among the two- in doing so, they end up missing out on better income opportunities as company FDs provide higher returns than those of banks.
The challenge in finding the right FD scheme among so many companies is solved by the credit rating. This parameter is similar to the credit score of an individual- credit rating reflects the repayment capacity of an organization and is determined after thorough research of a company’s risk (financial and business) and management.
Company FDs are more flexible and convenient when it comes to withdrawal of the deposited funds. Depositors can also avail a personal loans against their FDs if required. The interest payout can be monthly, quarterly, bi-annually and annually. Individuals belonging to varying income brackets can opt for company FDs.
With sufficient research on the credit rating, scheme details and application procedure, an investor can earn great returns from a secure company FD.
Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms.