Fixed Deposits

FDs are one of the oldest and most common methods of investing. When it comes to assured returns, choosing the right type of savings scheme makes all the difference. Fixed Deposits let you make the most of value-added benefits as you create wealth at low risk.

Fixed Deposits in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits.

Types of Companies offering Fixed Deposits

• Financial Institutions

• Non-Banking Finance Companies (NBFCs).

• Manufacturing Companies

• Housing Finance Companies

• Government Companies &

You can also go for Fixed Deposits with Banks.

Features and Benefits :

• Company Fixed Deposits offer comparatively higher returns than banks.

• Choose the best tenure for you from a wide range as per your convenience. You can choose how frequently you want to receive your interest payments :

Maturity

Yearly

Half-yearly

Quarterly

Monthly

• Company Fixed Deposits are non transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused.

• Premature encashment of deposit is available any time subject to payment of prescribed penalty.

• Diversify Risk- The deposits should be spread over a large number of companies engaged in different industries. This way, you'll be able to diversify your risk among various industries/companies.

• Wide Choices- Many companies operating in the Company Deposit market. This will help you decide whether to renew or reshuffle the deposit.

• Attractive rates as applicable from time to time.

How to choose a good company deposit scheme?

Don’t go for Companies which offer interest much higher than market.
Ignore unrated Company Deposit Schemes. Look at only AA or AAA rated schemes.

Tax Deductions on Company Fixed Deposits

TDS will be deducted when interest payable or reinvested per customer, per company exceeds the amount applicable as per statutory rules in a financial year.

The Systematic Investment Plan (SIP) allows investor to save a fixed amount of rupees every month/quarter for purchasing additional units of Income (Debt) as also other schemes like Growth (Equity) and Balanced Funds and is ideal for meeting the following needs:

1. Higher education of children.
2. Decent Marriage of one's daughter.
3. Setting up one's son in business or profession.
4. Acquiring House/ Flat
5. Retirement needs.

Look at the following table and you may be pleasantly surprised on the benefits of investing systematically over the long term. An investment of Rs 1000/- per month, in a mix of instruments yielding a net compounded return of Rs 15% per annum, over a period of 25 years, can grow to over Rs27 lacs. The table below illustrates how a regular investment of Rs. 1,000/-per month grows over different time periods.

Period in (yrs)	Your Savings (Rs.)	Grows to @10.0% p.a. (Rs.)	Grows to @12.0% p.a. (Rs.)	Grows to @15.0% p.a. (Rs.)
5	60,000	77,172	81,104	87,342
10	1,20,000	2,01,458	2,24,036	2,63,018
15	1,80,000	4,01,621	4,75,931	6,16,366
20	2,40,000	7,23,987	9,19,857	13,27,073
25	3,00,000	12,43,160	17,02,207	27,56,561