What are Company Fixed Deposits?
The deposits made by investors in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. Along with manufacturing companies, financial institutions and Non-Banking Finance Companies (NBFCs) also accept these deposits.
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
- Regular income: Depending on the scheme, investors have the option to receive interest at monthly/quarterly/half-yearly/yearly intervals
- 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.
Important things to consider:
- Investors must carefully read the application form
- Check the rating of the company before investing
- Do a background check of the company before putting money into it
- Companies may change the interest rates on the fixed deposit schemes without any prior notice
Pramada provides the simplest investment solution for the following companies amongst others:
- HDFC Ltd
- Bajaj Finance Ltd
- Shriram Transport Finance Co Ltd
- Mahindra Financial Services Ltd
Strengthen your bond with your money
What is a bond?
A bond is a debt security, in which the authorised issuer – company, financial institution, or Government, offers regular or fixed payment of interest in return for the money borrowed by the said issuer. It is for a certain period of time.
How do bonds work?
- When you purchase a bond, the authorised issuer borrows money from you for a fixed period of time.
- This money earns you a predetermined interest rate at regular intervals.
- The principal amount is repaid at the end of the maturity period.
How are bonds different from stock:
- Bond holders are lenders whereas stock holders are owners in the firm/organisation/company.
- Bonds have a defined term of maturity while stocks have no fixed time period.
Pramada deals in the following types of bonds:
- Corporate Bonds
- Government of India or Reserve Bank of India
- Tax Free Bonds
- Capital Gains Bonds
- Infrastructure Bonds
Pramada Advisory only acts as a mediator between its clients and the company inviting/accepting fixed deposits, known as Principal Company. Neither Pramada nor its employees, directors, etc., endorse and/or certify the information provided by the Principal Company and shall not be liable (legally or otherwise) under any circumstances.