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
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:
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 will 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.
Bonds
NCD (Non-Convertible Debenture)
NCD
(Non Convertible Debentures) is essentially a debt instrument with a
fixed tenure that pays a certain rate of interest monthly, quarterly,
annually or at the end of the tenure.
The money invested is
returned either over the tenure of the investment or at the end of the
tenure (referred to as bullet payment). These are certificates issued by
companies to raise funds through the public issue. These instruments
cannot be converted into equity shares and usually carry higher interest
rates than the convertible ones.
8 % Tax Saving Bonds
The
Government of India 8% taxable saving bond 2003, is an instrument for
those investors who are seeking a secured return with almost no risk. It
is not a good option for those investors who are looking for capital
appreciation or high and risk free returns
Private Placement Bonds
Private
Placement is a way of raising capital through an offer for subscribing
to securities by a select investor class such as banks, mutual funds,
insurance companies and pension funds. Since here the securities are not
made available for subscription to public at large in the open market
but only to select specific investors, it is known as private placement.
Capital
invested in a company that is not publicly traded on a stock exchange
is known as Private Equity. It involves investors directly making
investments into a private company or conduct buyouts of public
companies resulting into the delisting of the public companies or
significant minority investments in Public Companies holding
non-tradable (i.e. Locked in) Equity. Capital for investment is usually
raised from the institutional investors.
Tax Free Bonds
Tax-free
bonds are debt instruments that pay income that is exempt from federal
and/or state income taxes. Tax free refers to certain types of goods
and/or financial products (such as municipal bonds) that are not taxed
and with earnings that are not taxed.
The tax free status of
these goods and/or funds may incentivize individuals and business
entities to increase spending or investing, resulting in economic
stimulus. Governments will often provide a tax break to investors
purchasing government bonds to ensure that enough funding will be
available for expenditure projects.
Capital Gain Bonds
Capital
bonds are being issued as "Long term specified assets" within the
meaning of Sub- Section 54-EC of the Income Tax Act, 1961. Those
desirous of availing exemption from capital gains tax under Section 54
EC may invest in these bonds.
Capital gains arising from transfer
of Long-term capital assets can be invested in these bonds within a
period of six months from the date of transfer of the asset for getting
exemption from the capital gains tax.Eg-REC & NHAI Bonds
Please contact us for more details. We will be happy to help you.
