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How To Select The Best Company Fixed Deposit Schemes In India?

By Author: Aishwarya Mahurkar
Total Articles: 291

This is a right time to invest in company fixed deposits. With a stronger economy and a higher cash flow, several people can choose high-risk investments. So, if you seek to invest in these company fixed deposit account, explore this article. Understand the vital factors for an investment. You can use this guidance to compare several companies in the market and select the most suitable one possible. Then, you can select the best company for your fixed deposits.


Credit rating:


Unrated companies are not a safe choice for investment. So, if you want to invest in company fixed deposit, choose the companies with the highest credit rating possible. Several credit rating agencies in India rate companies for their fixed deposit schemes. For example: CRISIL, ICRA, CARE, etc. So, select the best-rated companies. They are deemed more secure due to their business practices, returns and corporate structure. An ideal example of the best rated fixed deposit schemes will be DHFL.


Rate of interest:


Corporate FD schemes tend to have much higher and more competitive interest rates. So, these yield products present attractive choices. However, do not opt for unrealistically high rates, which cannot be sustained over a period of time. The optimal range for fixed deposit interest rates is 12 to 15%. Stick to this range and take other factors in the account as well.


Duration:


A longer tenure seems to be a financially smart choice. But, while investing in a company fixed deposit scheme, a right choice is anywhere between 1 to 4 years. A larger tenure can have a significant impact of organization’s ratings and servicing. So, if you have selected a right company, this is the best duration for optimal returns.


Taxation:


If you earn more than Rs. 5,000 in interest per year, tax will be deducted at source. A smarter move will be to invest lower amount. Then, you can tabulate your income tax and pay it accordingly. This is one of the constraints on the amount of investment you can make in a fixed deposit account. Most companies do not allow an individual to invest more than 10% in their FD products either.


Type of return:


Different companies offer their own returns on investment. The most common types are quarterly, bi-annual, annual and cumulative. From a safety standpoint, quarterly or biannual return is safer. But, a cumulative return is the highest yield possible on a company fixed deposit account.


We believe these insights will assist you select the most suitable company FD for you. Make the most of them. All the best!

Author Bio :

An experienced writer on finance topics, the author articulates of investment choices such as fixed deposit products in India & recurring deposit schemes. She writes about a variety of topics including the benefits of recurring & fixed deposit schemes and how to make the right investment choice.

Total Views: 72Word Count: 479See All articles From Author

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