A fixed deposit (FD) is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. The interest rate varies between 4 and 7.50 percent.
Benefits of Company Fixed Deposits
- Higher interest rate: The rate of interest is 2-4 percent high, as compared to the interest rate offered by banks on fixed deposits
- Depending on the scheme, investors have the option to receive interest at monthly/quarterly/half-yearly/yearly intervalsRegular income:
- Lock-in period: The minimum lock-in period for most of the schemes is six months, i.e. investors can withdraw their money post six months, anytime
- TDS: TDS is not applicable if interest earned is equals to or less than 5,000 for a year in a single company
Types of Investments available for subscription
Corporate Fixed Deposits-
Earn Upto 8.5% in AAA Rated Companies Like LIC Housing Finance Ltd, Canara Housing Finance Ltd , PNB Housing Finance Ltd, HDFC Ltd, Bajaj , Mahindra Groups, Shriram Groups.
Senior citizen investment plans with regular income
Senior Citizen Saving Scheme (SCSS) :
Interest rate: 7.4% /Quarterly/Tenure: 5 years/15 lac maximum can invest / Interest is Taxable
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Interest rate: 7.4 %/Tenure: 10 years/15 lac maximum can invest / Interest is Taxable
RBI Floating Rate Savings Bonds (NSC rates + 0.35%) changes in every 6 months once
Interest rate: 7.15% Half-yearlyTenure: 7 years/ No limits/ Interest is taxable
Post Office Monthly Income Scheme (POMIS)
Interest rate: 6.6% /Monthly/Tenure: 5 years/ 4.5 lac in single name.Maximum 9 lac / Interest is Taxable
Annuity Plans
Get upto 6.3% pa lifelong/ Immediate Pension / No limits / Taxable
Other Investments options
- Sovereign Gold Bonds – Earn 2.5%/pa. Halfly Interest , Tax free on Matuirty, Gold Linked Returns
- 54EC Capital Gain Bonds Tax Free Bonds –(PFC , IRFC, NHAI ,REC) 5 yr lock in , 5% interest ,Taxable
- GOI Securities
- Secondary Market Bonds – Get upto 8.5% in Perceptual Bonds,5% in Tax Free Bonds
Other alternate Options with Minimum Tax
Invest in Debts Funds like Banking & Psu Funds , Conservative Hybrid Funds ,etc. Invest & wait for 1 yr & give request of Systematic Withdraw option of 6 %.
NON-CONVERTIBLE DEBENTURES (NCD)
Non-convertible debentures are simply regular debentures, cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them. As a result, they usually carry higher interest rates than their convertible counterparts.
NCDs might be the answer to your quest for the investment instrument that offers high returns with moderate risk while giving you the flexibility of choosing between short and long tenures.
Note : Kindly check the interest rate before investing