An Alternative to Bank’s Fixed Deposit – Company’s FD

Fixed deposit is the first thing that will strike you when talked about safe and reliable investments. Fixed deposits (FD) are considered as one of the safest investment options, which is why it is the most preferred choice in India. Besides this, the investment avenue also benefits with higher returns in comparison to a savings account. Precisely, you can call it a middle term investment which involves both risk and returns on a balanced ratio.

Although fixed deposits is a preferred choice for many, these days many investors are posed with a question – whether to invest in FD or not. After the demonetization, the Indian economy has gone through major changes. Since the Reserve Bank of India (RBI) has cut down the repo rates to control the inflation, returns on all investments as well as loans have dropped down significantly. This can be exciting news for new home loan buyers but has certainly disappointed the investors.

Talking about fixed deposit investments, both banks, as well as Non-Banking Financial Companies (NBFCs), offer the investment avenue. The process is similar with both the financial institutions; except the interest rates. Compared to banks, NBFCs are seen to offer a bit higher rate of interest. The investment option offered by these NBFCs are called company’s fixed deposit as many corporate companies offer FD investment option.

Coming to the repo rate cut down, there has been a decrease of 25 basis point which has lowered the investment returns. As interest plays an important role in investments, it is certain to get intimidated with low returns. But there is no such reason to worry about. In case if you are planning to invest in banks fixed deposit and are worried about the returns, then you can preferably choose company’s fixed deposits. Since your main aim is to earn higher returns investing in NBFC’s fixed deposit can benefit you.

Why Company’s FD over Bank’s FD?

As mentioned above, you can earn higher returns by investing in NBFC’s fixed deposit in comparison to bank’s FD. Apart from high returns, you can also gain from various schemes and facilities offered by an NBFC. Many-a-times, people consider NBFCs less trustworthy, which is not true as they are equally reliable and safe as banks. Many NBFCs are awarded ICRA’s MAAA rating and CRISIL’s FAAA rating which means, they are reliable as well as safe to invest in.

Facilities offered by Company Fixed Deposits:

  • Online Assessment: 

The company’s fixed deposits allow you to access your FD online. Wherein, you can apply for the fixed deposit online as the process is quite fast and time-saving. As the application process is online, instead of visiting the NBFCs in person you can get it done easily from anywhere.

  • FD calculators:

As said earlier, interest rate plays an important role in the process of investment. And thus, it gets crucial to know what returns you will be earning over it. Using an online fixed deposit calculator can help you calculate the interest you will be earning. You can visit the website of your lender and calculate the returns depending on: The invested amount, interest rate and tenure.

  • Senior citizen fixed deposits:

If you are a senior citizen, then you don’t have to worry about the repo rate cut down, as you can still benefit with higher returns than normal fixed deposit investors. A senior citizen can earn higher interest rates than usual investors by investing their pension funds in senior citizen fixed deposits.

Even though the interest rates have dropped down, you can still earn higher returns on an FD investment by investing in company’s fixed deposit as well as can gain from various schemes and facilities offered by them.