Fixed Deposits (FD's)

FD’s are one of the oldest and most common methods of investing. Incase you do not know how it works, you have to give the financial institution a certain sum of money for a certain fixed period of time. After that time period is over you will get the original amount with some interest that you have earned for the time period you invested your money.

Just to give you an idea about the time periods and the interest rates you can earn, you can check this out. It is a link to the ICICI Bank FD interest rate chart. All the major banks and other financial institutions also have different FD offers.

FD’s are not very “liquid” investments. If you invest your money in FD’s, you will not be able to withdraw it until the FD matures. Generally, if you need to remove your money before the maturity of the investment, you will be able to do so but you will loose the interest that you were supposed to earn. There are some FD’s that allow you to claim your interest every month or every 6 months etc. There are many different schemes with many different offers!

Besides this, if a particular interest rate is decided at the time of investing and the interest rate goes up while your money is invested, you will not be able to enjoy the higher interest rate.

However, now-a-days the banks and the financial market is becoming very competitive. You need to check up on the different types of FD schemes available before making any FD investments.

There are FD’s offered by non-financial institutions like companies etc. also. These are generally FD’s that will give good rate of returns. They are called Company FD’s.

However, the risk involved is also moderately high. However, the companies try to get themselves an AAA rating according to the specifications of the RBI. If a company has an AAA rating, then it can be considered to be a safe investment.

How do I buy a company fixed deposit?

Company Fixed Deposits forms are available through various broking agencies or directly with the companies.

What is the minimum investment for a company fixed deposit?

Minimum investment in a Company Fixed deposit varies from company to company. Normally, the minimum investment is Rs.5,000. For individual investors, there is no upper limit. In case of recurring deposits, the minimum amount is normally Rs.100 per month.

What is the duration of the Company FD scheme?

Company Fixed Deposits have varying duration; they may vary from a minimum of 6 months to 5 years or even more.

To check out some companies and the rates that they give, you could check out this link. You can also use Bajaj Capital to invest in these Company FD’s.