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Fixed Deposits

Company Fixed deposits earn a fixed rate of return over a period of time. Financial institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by the Companies Act under Section 58A. These deposits are unsecured, and hence incase of any default by the Company, the investor cannot sell the company to recover his capital, thus making it a risky option of investment.

Company Fixed Deposits are adequate for regular income with the option to receive monthly, quarterly, half –yearly, and annual interest income. Moreover the interest rate offered is higher than banks. Performance of the companies should be reviewed at maturity. This helps in deciding whether the deposit should be renewed or not. One should also keep track of these companies by checking their Balance Sheet, Share prices.