All you want to know about Company Fixed Deposits..!

Company FDs have gained popularity among several companies as they provide higher rate of interest and better flexibility compared to the bank fixed deposits. Moreover, their simple-to-understand features and easy online application makes it feasible for employees to make the most out of this investment option.

Secure Way to Start for Beginners

Company Fixed Deposits are the most secured way to start with if you are beginner. Company fixed deposits are not affected by market fluctuations. Also, they do not lead to loss of revenue due to crashes. Being new in the market and amateur at investment schemes, beginners need a little more experience before investing in bigger schemes. Hence, company FD are a good option for the start.

Invest Small Receive Big

Many finance companies allow opening an FD account with as small amount as Rs 25000. Those willing to invest with a minimum amount can meet this requirement. In addition, the good news is that despite putting in a small amount, the return that you receive at the end of the tenor is quite big (depending upon the tenor you select).

Higher Rate of Interest

When you think of FDs, bank is what comes to your mind. Apart from banks, there are several Non-Banking Financial Companies (NBFCs) that offer the facility of fixed deposits. Here, fixed deposit interest rate offered is higher compared to the savings accounts or FD interest rate of other banks. For instance, Bajaj Finance fixed deposit offers 8.2% interest for senior citizens and 8.15% for clients who have availed loan facility with them. For new investors, they offer 8.05%, which is the highest fixed deposit interest rate in the market.

No TDS on Company Fixed Deposits If…

If the interest on your FD is less than Rs.5000 in a year, no TDS is levied. Hence, as an investor you are at a benefit, if the interest amount does not exceed the limit. In case, if you observe that your interest amount is exceeding Rs 5000, you can opt for other similar investment schemes with tax exemption.

Track Record of the Company

Before investing your hard-earned money in any of the companies, it would be advisable for you to check their track record. Although the companies may offer higher rate of interest, a background check about the reputation of the company and their performance in the market always helps. The better the company and higher its value in the market, the more benefits you earn. Being a valuable asset, FDs can be pledged to the bank to avail the facility of Loan against Securities.

Easy Application

With all the financial companies going digital, it is now easier to avail the facility of company fixed deposits with a click. The online application process can help you apply for loan sitting at home, and have the documents collected by the company’s representative at your convenience. The entire process being a transparent one, gives you no reason to be skeptic about your investment. The online application process is designed especially for senior citizens, students and homemakers who cannot stand in the long queues or travel long distances.

Cumulative/Non-Cumulative – The Choice is yours

Making this choice depends upon your financial requirement. If you are willing to receive the whole amount of interest at the time of maturity, you can opt for cumulative fixed deposit. However, if you are willing to enjoy the interest on monthly, quarterly, half-yearly or annually, you can choose non-cumulative fixed deposit. So, choose smart to live smart!

May 21, 2018