Thursday 30 June 2022

Are You Investing in a Fixed Deposit in 2022?

Are You Investing in a Fixed Deposit in 2022?

We live in a competitive world where every industry adapts technological advancement to compete and be more successful than others. NBFCs (Non-Banking Financial Companies) and banks strive to succeed by offering competitive interest rates and flexibility on fixed deposits.

Although there are many competitive NBFCs in India, Shriram Transport Finance Company leads the race by providing the highest interest rate in India of 8.40%* and the highest degree of safety (“IND AA+/Stable” by India Ratings & Research) for investments.

Non-Banking Financial Companies are generally resistant to the changes brought by RBI (Reserve Bank of India) in the policy rates. So investing in an FD (Fixed Deposit) via NBFC is more lucrative than other FD options offered by banks and post offices.

What is a Company Fixed Deposit?

A company fixed deposit or corporate fixed deposit is an investment option offered by Financial and Non-Banking Financial Companies (NBFCs). Like banks, NBFCs collect deposits from investors for a fixed tenure. However, you should know the significant difference that NBFCs offer higher interest rates than banks.

While RBI guidelines manage banks, NBFCs are recognized by rating agencies like CRISIL, ICRA, CARE, etc. So, company fixed deposits with higher ratings will carry lower chances of defaults at maturity. And, you can choose those company FDs and confidently start your investment.

Features of a Company Fixed Deposit

Although banks and NBFCs share many similarities, NBFCs have specific features that banks do not possess. As part of your investment journey, you must first understand the basic features of a company fixed deposit and then decide on the FD investment.

  • NBFCs offer several interest pay-out options like monthly, quarterly, half-yearly, and annually, and you can choose the pay-out based on your financial requirements.
  • NBFCs also offer cumulative FD, where compounding interest calculation helps you maximize your investments in no time.
  • NBFCs allow premature withdrawals on your fixed deposit account but with a penalty.
  • You can get a loan against your company's fixed deposit. However, NBFCs charge 2% higher interest rates than company fixed deposit interest rates.
  • The interest income earned from company fixed deposits is not exempt from tax.
  • Although RBI does not manage NBFCs, they are totally safe for fixed deposit investment.

5 Key Benefits of Company Fixed Deposits

A company fixed deposit might sound like a very new concept to you. But, this FD scheme has been in the market for a long time. Read further to understand the critical benefits of a company fixed deposit.

  1. Assured Returns – As NBFCs are rated for safety by CRISIL/ICRA/India Ratings & Research, a company FD is safe and the returns are assured.
  2. Higher Interest Rates – NBFCs offer the highest interest rate on a fixed deposit. For example, Shriram Transport Finance Fixed Deposits provides the highest interest rate in India, i.e. 8.40%*.
  3. Flexible Tenure – NBFCs generally offer flexible tenures for you to choose from for your fixed deposit investment.
  4. Interest Pay-Out Frequency – NBFCs allow you to choose interest pay-outs (monthly, quarterly, half-yearly, and annually) based on your requirements.
  5. Penalty - All fixed deposits from banks are subject to a three-month lock-in period. However, with NBFCs, you get the privilege to withdraw cash from your FD anytime in case of emergencies.

Tips to Choose NBFC with Highest Interest Rate

Here are a few tips to help you choose an NBFC with the highest interest rate.

  • Many NBFCs claim to offer attractive interest rates, but it is a must to check the ratings of your NBFC before you invest.
  • Check an NBFC with a better track record within a specified rating grade.
  • After you have finalized your NBFC, choose schemes that have shown promising results in the past.
  • Choose cumulative schemes that generate a stable and regular income if you require a monthly income.
  • You must check an NBFCs operational efficiency because you will need essential operational services during investment.

Shriram Transport Finance Company

STFC (Shriram Transport Finance Company) is the company/NBFC that offers the highest and best interest rate on fixed deposits in India. Moreover, STFC has been accredited “[ICRA]AA+ (Stable)” by ICRA. As per the ICRA, the able rating proves high credit quality with low credit risk.

STFC has a vast customer base of around 2.12 million investors in India. Their fixed deposits come with “IND AA+/Stable” by India Ratings & Research, assuring the highest safety and guaranteed returns.

Invest in the Best!

The competition in the finance industry is growing rapidly in 2022, and many new players are entering the market with attractive interest rates. So, be careful when choosing an NBFC for your investment.

Companies like Shriram Transport Finance have an excellent reputation in the investment market and are trusted by millions of Indians. So, do your research, finalize your NBFC, and start your fixed deposit investment with the best NBFC in India.

In conclusion, investing in fixed deposits (FDs) in 2022, especially through Non-Banking Financial Companies (NBFCs), offers lucrative opportunities due to higher interest rates and flexible terms compared to traditional banks. Notably, Shriram Transport Finance Company (STFC) stands out with its industry-leading interest rate of 8.40%* and strong safety ratings by ICRA and India Ratings & Research, ensuring secure and profitable investments.

While banks and NBFCs share similarities, NBFCs like STFCs provide distinct advantages, such as varied interest payout options and flexible tenures. Despite the risks associated with market fluctuations, company fixed deposits remain a secure investment avenue, given their regulation by credible rating agencies like CRISIL and ICRA.

Investors can confidently choose company FDs, ensuring assured returns and high credit quality.

However, careful selection of NBFCs is crucial. Investors should look for NBFCs with solid track records, high ratings, and operational efficiency. Companies like STFC, with a vast customer base and trusted reputation, exemplify the best in the market.

As the financial landscape becomes increasingly competitive, thorough research and wise selection of NBFCs will allow investors to maximize returns and achieve financial stability.

Investing with reputed companies like Shriram Transport Finance ensures a safe and rewarding fixed deposit experience.

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