Is your money safe in a company FD?

Is your money safe in a company Bank FD? Company fixed deposits are those issued Non-Banking Financial Companies or NBFCs. While banks and post offices also offer fixed deposit, company FDs generally offer a higher interest rate as compared to the other two. Typically, a company FD offers interest that is  50-100 bps higher than what banks offer. 

 

Moreover, if you are a senior citizen, you can earn an additional 25-40 bps interest by investing in company FDs. However, investing in a safe company fixed deposit is just as important, which is why you must choose the right company FD to grow your wealth in. As there are many such FDs available in the market, given below are some factors to help you ascertain how safe your financier is, before you invest. 

FDs offered by the bank are considered to be safer because they are backed by the government and governed by the RBI. Even in a worst-case scenario, the Deposit Insurance and Credit Guarantee Corporation insures your deposit up to Rs.1 lakh annually. However, with company FDs, there is no such guarantee.

 

Therefore, it’s imperative that you invest in a safe investment instrument. The best way to gauge the safety, in such cases, is by checking the ratings of the company. 

 

Credit rating agencies such as CRISIL, CARE, and ICRA rate company FDs based on financial risks, the capability to service debt, business risks, and management quality. For instance, CRISIL assigns an ‘FAAA’ to the company with the highest safety in terms of principal and interest payment. 

 

As safety decreases, the number of ‘As’ in the rating also decrease. Therefore, it is recommended to choose a company with a rating not lesser than AAA or AA.  

 

Bajaj Finance Fixed Deposit is one of the safest investment instruments, with the highest stability ratings of FAAA by CRISIL and MAAA by ICRA. With an international rating of ‘-BBB’ by S&P Global, Bajaj Finserv is one of the safest options to park your investment amount. 

Another way to determine the safety of a company is by checking the number of clients it services. A large client base means that the company has experience in dealing with customers and strives towards retaining them.

 

For instance, Bajaj Finance has over 2.5 lakh happy FD customers. As a prospective investor, this provides you with the assurance that the issuer can handle your investment safely and will offer you excellent customer service whenever you need assistance.

In addition to checking the number of customers served, make it a point to see the amount they choose to deposit with the company. This is a reflection of the level of the customer’s trust in the company. For example, Bajaj Finance has an impressive book size of more than Rs.16,000 crores. 

 

This means that Indian investors are comfortably growing their wealth with this highly lucrative and reliable instrument. 

Senior citizens have a low-risk appetite and tend to lean on investment options that are almost risk-free in nature. So, a company with a high number of senior customers on its roster is one worth investing in.

 

Bajaj Finance serves a whopping 61,000 senior customers, who contribute towards a book size of about Rs.3,300 crores. The NBFC offers these investors an FD interest rate of 0.35% over and above the normal rates to further sweeten the pot. 

 

This means that not only can you enjoy an interest rate of up to 8.70% on Bajaj Finance FD when you opt for a tenor of at least 36 months, but you can also benefit from features like a loan against FD of up to Rs.4 lakh during emergencies. 

 

Moreover, through the multi-deposit facility, you can also invest in several deposit via a single cheque. The NBFC further enables you to choose a tenor between 1 and 5 years to customise your investment. To better understand your potential earnings as a regular investor, take a look at the following example.

 

 

By keeping these 4 factors in mind, you can choose a reliable company FD in no time. Should you wish to invest with Bajaj Finance right away, simply fill the Bajaj Finance online FD form and make use of the many features that are on offer.