Thursday - Sep 19, 2019

5 important points to keep in mind before investing in a company FD


Fixed deposits are one of the oldest, most sought-after investment options. This is because the interest returns on your FDs are not linked to market fluctuations. So, you can get assured returns basis the initial interest rate committed by your issuer. This also makes fixed deposits a balanced option using which you can even out the risk of equities and other options in your investment portfolio.

Here are 5 facts about company fixed deposits that you should keep in mind to make an informed decision.

  1. You can earn attractive returns: Fixed deposits are offered by both banks and companies. When you invest in a company FD, you usually get a higher interest return as compared to bank FDs. If you wish to enjoy higher interest rate benefits on a company FD, consider investing with reputable financial institutions like Bajaj Finance.
  2. You can invest in a cumulative FD for a minimum of 36 months and earn an interest of up to 8.75% as a regular investor or 9.10% as a senior citizen. In addition to this, you also enjoy higher interest each time you renew your FD. Also, Bajaj Finance Fixed Deposits are stable and credible so you can always be sure to receive your FD maturity on time.
  3. You can enjoy tax benefits: Your company fixed deposit interest income is exempt up to Rs.5,000. You can also submit Form 15G and Form 15H to request the issuer not to deduct TDS on FD interest income if you don’t fall under the minimum tax slabs for a financial year.
  4. You can calculate your maturity amount beforehand:  You can use the FD calculator to calculate the maturity amount for your fixed deposit. To ascertain the maturity amount, you just have to enter simple details like the interest rate, tenor and deposit amount. You can also tweak the figures for these parameters to arrive at various maturity amounts that fit the bill for you. This will help you choose varied FDs for investment so that you are able to meet your financial needs at different points of time.
  5. You can add a nominee for your investment: Company FD gives you an option to add a nominee to your fixed deposit investment. So, you can nominate your loved ones to receive your FD maturity amount if something untoward happens to you. Having a nominee is practical and allows you immense peace of mind.
  6. You can choose how you want to receive returns: When you invest in a company fixed deposit, you enjoy flexibility with respect to how you want to receive returns. By investing in a cumulative FD, you get to access the entire interest on maturity along with the principal amount. This is best suited for you if you are not in immediate need of money, but are investing to meet a financial goal, say, to buy a car or to go on a vacation.

 

However, if you are a senior citizen and need regular interest income to meet your monthly expenses, you can invest in a non-cumulative FD where you can access and withdraw the interest earnings on your investment at regular intervals. You can choose the interest payout interval as per your convenience from monthly, quarterly, semi-annual and annual options. Moreover, you can also choose a tenor basis your comfort starting from as low as 12 months.

Keep in mind the aforementioned points and invest in a company FD by selecting an issuer who offers the best fixed deposit interest rates. Make an informed decision now so that you can gain from fruitful returns over time. You can also consider laddering various fixed deposit to enjoy liquidity at different points of time.