Company Fixed Deposits: Interest Rates And Other Factors To Consider Before Investing

As an astute investor, you might have looked beyond bank FDs to find higher returns. There are various fixed-income investment instruments that offer pre-determined returns and you can know the exact amount of maturity. PPF, Senior Citizens Saving Schemes, Post Office Savings, and Nation Savings Certificates have a predetermined rate of interest. In debt-based investments like bonds and debt mutual funds, one is unsure of the exact return till you actually sell the instrument and book the notional profit into a real one.

Company Fixed Deposits

So with all these varieties, it is only logical that you look at company fixed deposits – one of the highest paying fixed-investment instruments. Company FDs are fixed deposits issued by private or public companies with an aim to raise capital for their operations in other subsidiaries or lending purposes. These are non-banking financial companies (NBFCs) working under the oversight of the central bank of India, the Reserve Bank of India (RBI).

Why should you consider Company Fixed Deposits?

These are the underrated high paying instruments which provide you all the features of a bank FD and much more. If you compare a Company FD list, you will realize there are few factors to consider before zeroing in on the right company FD –

  • Interest rates – Company FDs are the best FDs in the market. Check the rates for various tenors. FDs like Bajaj Finance offer a minimum of 8.65% for a new customer and a maximum of 8.95% for senior citizens. These are one of the highest rates in the market that you can get for any fixed-investment instrument.
  • Tenor and flexibility – Most company FDs will have a tenor of 1- 5 years. Bajaj Finance FD offers its highest rates at 5 years of tenor and you can choose your FDs accordingly to the finalization of your goals.
  • Safety and guarantee – Safety is of utmost importance and ensures that you do not compromise on the guarantee of repayment for higher returns. Credit assessment of Bajaj Finance FD is done by well-known credit rating agencies. It has received an MAAA (stable) rating from ICRA and FAAA (stable) rating from CRISIL. These are regarded as safe and secure as a bank FD. This is a very important aspect to note as the company needs to be steady and should have sound financials. A bank deposit is guaranteed by DGIC up to the amount of Rs 1 lakh per depositor but in a company FD this is the best assurance you can receive and there is no cap on the maximum sum insured.
  • Return on Investment (ROI) higher than Bank FDs– You can simply use the Online FD Interest Calculator India to check on the maturity amount of your capital as per tenor. Bajaj Finance allows you to do this simple calculation and whether you are a new customer or a senior citizen investing, you are assured to receive a minimum of 51% return on investment.

This is one of the highest ROI in just 5 years among most other FDs. Using Bajaj Finance Fixed Deposit, you can ensure a lucrative return and sizeable corpus on your investment.

  • Cumulative and noncumulative interest payouts– These are common options available across company FDs and you can look at either a non-cumulative or cumulative interest payouts.

        A cumulative option will pay interest at the time of maturity and keep earning interest on interest which can be a great way to multiply a corpus.

       If you are looking to augment your monthly income with a payout from the FDs -choose non-cumulative FDs and a time interval– monthly, quarterly or half-yearly. This can be used to supplement another of your investments as well.

        As you can see there are various points to consider while going for a company FD.  Along with choosing the highest rate of interest, the highest safety is of utmost importance.