Has the interest rate of an FD been reduced? So now invest money here, the risk will be less, and the profit will also be more.

For some time now, the interest rates of bank fixed deposits (FD) have been continuously falling, which has increased the concern of investors making safe investments. In such a situation, if you are also looking for better returns from FD but do not want to take much risk, then there are two excellent options available in the market. Know about them here.
Fixed deposit i.e. FD has been the most reliable and preferred means of investment for years. In this, money is deposited for a fixed time and the bank gives a fixed interest on it. But in the recent past, most banks have reduced the interest rates on FD. In such a situation, investors are seeing less profit and hence they are looking for such investment options, where they get better interest and there is not much risk in their investment. If you are also looking for an option of FD, then you have two such options which can prove to be beneficial. Know about them here.
First option: Corporate Fixed Deposit
When the bank needs money, it takes money from you in the form of FD. Similarly, when big and established companies need money for their business, they borrow money from the general public at a fixed interest rate. This is called Corporate Fixed Deposit or Company FD.
What are the benefits
The biggest attraction of Corporate FD is its interest rate. This interest is usually 1% to 3% higher than bank FD. While you will get 5 to 7 or 7.5% interest in the bank, you can get 8 to 10% return on FD of a good company. The maturity period of Corporate FD is also from 1 to 5 years. Like the bank, the interest rate can be different for different periods. Apart from this, like bank FD, you also get a fixed return in it, which is not affected by the fluctuations of the market.
How much is the risk?
The biggest risk in this is the default of the company. If the company sinks for some reason, then your money can get stuck. While in bank FD, the deposit amount up to Rs 5 lakh is insured by DICGC, but there is no such guarantee in corporate FD.
How to make safe investments?
Always invest in companies with good credit rating. Before investing in corporate FD, check the 10-20 year record of that company. Invest only in those companies which are making profits. If companies with AAA or AA rating are offering FD, then investment can be made in them. Investing in FD of big and reliable companies can be a safe step.
Second option: Debt Mutual Funds
Debt Mutual Fund is a type of mutual fund. In this, a fund manager collects money from many investors like you and invests it in fixed-income options, such as government bonds, corporate bonds, treasury bills, etc. In simple words, your money is not invested in a single company, but in many safe places little by little.
What are the benefits
The first benefit is diversification. In this, your money is divided into many bonds, which almost eliminates the risk of default of any one company. Although returns are not guaranteed in debt funds, but all past records show that debt funds give better returns than FDs. In the long term, you can expect a return of 7% to 9%. Apart from this, if you invest in debt funds for more than 3 years, then you get indexation benefit. This reduces your tax significantly.