Invest in Corporate Deposits, RBI Bonds and NCD's.
A Corporate Deposit (FD) is an investment in a company for a fixed period of time at a prescribed rate of interest. Both, Financial and Non-Banking Finance Companies (NBFCs) raise capital via such deposits to use the money. The mobilized Deposits are governed by the Companies Act under Section 58A. These deposits are unsecured, which means if the company defaults, the investor cannot sell the documents to recover his capital, thus making it a bit risky investment option.
Interest is paid on a monthly/quarterly/half yearly/yearly or on maturity basis and is sent either through cheque or ECS facility.
Choosing a good company deposit scheme-Infinitum Wealth advisors help clients in choosing the best schemes for corporate deposits to gain maximum profit and avoid any loss.
We follow the above-mentioned criteria before suggesting a company deposit:
» we ignore the unrated Company Deposit Schemes and deposit schemes of little-known manufacturing companies. We check on our front the ‘A’ rating of the company to be eligible to accept public deposits as issued by RBI. Our advisors suggest you look at only AA or AAA schemes offered by growing firms of the nation.
» We thoroughly check rating grade, history, and reputation of the firm.
» Once you decide on a company as suggested by us, next we help you in choosing the schemes that have given a better return in the past. We recommend cumulative to regular income option, since the interest earned automatically gets reinvested at the same coupon rate giving upon better yields. And also gives you a lump-sum amount at one go.
» the best way is to make a shorter deposit of around 1 year to 3 years. In this way, you not only can keep a watch on the company’s rating and servicing but can plan to have your money back in case of an emergency.
» We do not suggest companies that don’t care about investor services like promptly sending interest warrants or the principal cheque.
» We do not bypass and invest directly just to earn an extra incentive. Our advisors work thoroughly to study the past trends of the company to have an idea of the future investments.
RBI bonds
Due to falling interest rates of Fixed Deposits offered by Banks, RBI Bonds are just a blessing in disguise. It is the best deal for investors, who are looking to invest a lump-sum and earn 7.15% variable returns which are 1-2% higher than Bank deposits schemes.
The Bonds are issued by RBI (Reserve Bank of India) with an interest rate of 7.15%(compounded half-yearly). Individuals (single, joint or minor), corporates and HUFs (Hindu Undivided Family) can invest in them, however, NRI’s are not eligible to invest in the bonds issued by RBI.
The Face Value of Bond is Rs 1,000 and the minimum investment is 1 bond (Rs. 1000). The best part is that there is no maximum limit on Investment, which makes them suitable for any amount of investments. The RBI Bond tenure is 7 years.
Our advisors provide you the best kind of options according to your requirement. One can read all the instructions online, contact us for more information and choose from cumulative and noncumulative forms of investment by seeking our experts advise.
Basic difference:
In Cumulative, one receives Rs 1,703 at the end of 7 years on maturity for every Rs 1,000 invested whereas in Non-cumulative, interest is paid on August 1 and February 1 every year.
Why you should Invest?
1) 7.15% interest is higher than the most banks offer today.
2) As bonds are issued by RBI and are sovereign rated, there is no credit risk and are safe.
3) nomination facility is offered as well.
Best suited for Senior Citizens:
1) Lock in period for investors in the age bracket of 60 to 70 years shall be 6 years from the date of issue.
2) Lock in period for investors in the age bracket of 70 to 80 years shall be 5 years from the date of issue.
3) Lock in period for investors at the age of 80 years and above shall be 4 years from the date of issue.
In case of joint holders or more than two holders of the Bond, the above lock-in period applies, even if any one of the holders fulfil the above conditions of eligibility.
In case one wish to do a premature surrender, 50% of the interest due and payable for the last six months of the holding period will be recovered as a penalty from the investor.
Partial withdrawal is not permitted in this case which makes them suitable for long-term investing beating Indian’s tendency of using their investments for impulsive buying.