What Factors should i Consider While Investing in Corporate Fixed Deposits?


Investing your hard-earned money is an efficient way of growing your wealth. Moreover, in today’s financial market you have access to a plethora of options to invest in, and therefore it is your responsibility to pick a safe instrument. Obviously the first avenue that comes to mind is a fixed deposit, and this is because over the years it has proven itself to be one of the safest options that you can choose. Besides high security, fixed deposits offer good interest rates making them an extremely lucrative way to generate returns.

However, before you invest in a company deposit, here are a few factors that you should consider so that you can make a better decision.

Stability rating

Regardless of the size of your investment, the very first thing that you must check when considering an NBFC fixed deposit is its stability ratings. As these FDs are not insured up to a certain amount by a government body, the only measure of their security is the rating that credit agencies give to them. Some well-known agencies are ICRA, CRISIL, CARE, BWR and India Rating and Research Pvt. Ltd. Most fixed deposit offers that are worth considering will bear a rating from at least one of these bodies. 

In this regard, the Bajaj Finance Fixed Deposit is a good pick as its stability and credibility have been certified by two credit agencies. It has secured both, CRISIL’s FAAA and ICRA’s MAAA ratings, that indicate the highest level of investment security. This means that your investment is not only safe, but that the issuer is adept at managing asset portfolios and is consistent with interest payments. You will get the amount due to you, on time.

Interest rate 

A major benefit of opting for a company deposit is that it offers a higher FD interest rate in India as compared to other fixed deposit issuers. However, remember to check the credibility rating beforehand. This is important as some issuers offer a high interest rate but also carry a high risk factor. 

The Bajaj Finance Fixed Deposit is a good example of the ideal combination. It gives you an interest rate of 8.95% if you’re a senior citizen, and 8.60% if you’re a regular investor. This is applicable when you opt for a fixed deposit for at least 36 months with interest payable at maturity. The interest rate, coupled with high stability ratings make this FD a secure, lucrative investment. 

Investment tenor 

A key benefit to look out for is flexibility, especially with regards to tenor. While banks have strict investment protocols to follow, NBFCs have a lot more freedom. This is expressed by some fixed deposit issuers through their tenor policy. For example, the Bajaj Finance FD lets you invest for a tenor that ranges from 12 to 60 months. This is immensely beneficial as it allows you to invest as per your needs. With proper planning, you’ll never have to break a fixed deposit prematurely or refrain from investing because of an unsuitable tenor. 

Premature withdrawal policy

Before investing in a Company Fixed Deposit, look into the withdrawal process. Assuming that you require finances prematurely, check the procedure, disbursal time frame and charges associated. Usually, NBFCs make it easy for you to access your funds in lieu of a nominal fee, but it’s best to check the terms and conditions. Also remember that you must only prematurely withdraw when you’re in dire need of funds to maximise your earnings.

Ease of investment

You shouldn’t have to go through a tedious procedure to invest, so assess this aspect before you commit to a fixed deposit. For instance, Bajaj Finance’s FD facilitates convenience by allowing you to apply online. You only have to fill and submit a short form after which an executive will call you and guide you on how to complete the remaining steps. 

It is important to keep all of these factors in mind before you invest in an NBFC fixed deposit so that you can pick one that serves your needs best and offers you maximum benefits without any risk. 

In fact, whatever your needs are, you will find that the Bajaj Finance Fixed Deposit meets them comfortably. With its flexible tenor, you can invest for anywhere between 12 to 60 months or opt for a special tenor scheme. It is also easy to invest in this FD as the minimum investment amount is just Rs.25,000. Furthermore, you get access to an online account that lets you monitor your fixed deposit investment and get updates in real-time, as per your convenience. So without further ado, check the interest rate applicable to you using an FD calculator and start investing!