Fixed Deposit: Leave banks and post offices, and invest in this FD... it will give you huge profits
If you want to include fixed deposits in your portfolio, then invest in corporate FD instead of banks and post offices. In this, you can get better interest than bank FD. Know its benefits and other important information.
Despite the availability of many investment options, many people still believe the most in fixed deposits. Experts also believe that there should be many different schemes in your financial portfolio and everyone should include FD in their portfolio. Usually, people invest in bank and post office FDs, but if you want to bring more profits and variety to the portfolio, you can also invest in corporate FDs. Here you can get better returns than bank FD and post office FD. Know the benefits here.
What is Corporate FD
Corporate FD is issued by many companies. Through corporate FD, companies raise funds from people to meet their needs. This FD also works exactly like a bank FD. For this, the company takes capital from investors for a fixed period and returns the amount to the customers along with interest. To attract people, better interest is offered in corporate FD than in bank FD.
How much profit can be earned?
By investing in a bank, you will get 5 to 7 or 7.5% interest, but by investing in corporate FD, you can get a return of 8 to 10%. Usually, the maturity period of corporate FD is from 1 to 5 years. Like the bank, the interest rate can be different for different periods. Just as additional interest is given to the elderly on FD in the bank, similarly in all corporate FDs, the elderly are also given additional interest as compared to normal FD. But along with the high-interest rate, there are some risks associated with corporate FDs, which you should know. If you can take risks, then corporate FDs can prove to be a better option for investment.
What are the risks of corporate FDs?
Generally, bank FDs are considered a safe option for investment because the strict rules of the Reserve Bank are followed. However corporate FDs have a little more risk than bank FDs. If the bank sinks, the deposited amount gets insurance benefits under DICGC, but there is no such insurance on corporate FDs. If the company sinks, your money can also be lost. However, if you invest in companies with good ratings, the risk can be reduced significantly.
Choose a company for investing in corporate FDs like this
If you have made up your mind to invest in corporate FDs, then invest only in companies with high credit ratings. Before investing in corporate FDs, look at the 10-20 year record of that company. Invest only in those companies that are making profits. If companies with AAA or AA ratings are offering FDs then you can invest in them.
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