Company FD: Big news! Company FD is many times better than bank FD, will get more than 7% return and loan facility separately

Fixed Deposit ( FD ) is in great demand among the people of India. FD is considered to be a better means of earning as well as saving. If you want good returns with safety in a short period, then FD can be invested.

Some people invest their money in Bank FD , while some people invest money in Company Fixed Deposit . Although there is not a huge difference between the two types of FDs, but in terms of returns, company FDs give slightly higher returns than bank FDs. The tenure of both the FDs is almost the same, but there is a difference in the interest rate. This is the reason why people prefer to invest in company FDs to earn more.

Company FD is a type of term deposit. Investments are made in this FD so that it can get a fixed return over a fixed period. Fixed interest rates are also given on FDs to give assured returns. The tenure of a company FD can range from a few months to a few years. It will depend on your need and financial goal that for how many months or years to invest in Company FDs. A report in ‘ Financial Express ‘ states that the return or interest you will get on company FDs will depend on the agreement with the company in which you have deposited the money.

Features of Company FD

Company FD is also called Corporate FD. If you have to go on a foreign trip, buy an expensive electronic gadget or give an expensive gift to a friend or relative, then you can invest money in a company FD. After planning your expenses, one can invest in corporate or company FDs. Company FD is better for higher returns in the short term. One major difference compared to bank FDs is that company FDs come with a shorter lock-in period. That is, it can be broken even in a short day.

In case of emergency, the company can also take a loan against FD. How much you will get the loan will depend on your company. The company decides the loan amount according to it. However, 70-80% of the amount invested in FD can be taken as loan. If you are going to take a company FD, then first definitely find out the rates of other companies. Read the terms and conditions.

Also check the credit rating of company FDs issued by companies like CRISIL, ICRA and CARE. If you take a corporate FD from a big and a trusted company, then the risk will be less. Such institutions give high returns along with safety. Company FDs are taxed according to the tax slab of the investor. Keeping this in mind, invest money only.

(Input from bankbazaar.com)