The FD Return Calculator displays that Corporate Deposits can fetch much higher returns than traditional fixed deposits. CDs offer you ample liquidity as easy access to loans by pledging the investment certificate. Besides, you can always opt for premature withdrawal. Such withdrawal made within 6 months of the deposit attracts no penalty. In addition to the guaranteed return, CDs will likely fetch your additional income as a portion of the company’s profit. Therefore, for investors with slightly high risk-bearing capacity, Corporate FDs are the best investment tool to ensure financial endowment within much lesser time than the classic FDs with the banks and NBFCs.
Should you use traditional fixed deposit plans with banks and non-Banking financial service companies or put your resources in the Corporate FD? Your financial freedom and endowment depend on your accuracy in selecting the investment tool. Therefore, decision-making is not appropriate just by checking the FD Return Calculator. Rather, it would help if you delved deep into the topic to find which investment best fits you and support your short- and long-term financial goals.
Corporate FDs fetch better returns than classic Fixed Deposits
The major difference between classic FDs and modern CDs is the body that accepts the deposit. In conventional FDs, you will deposit with Banks and NBFCs. On the other hand, Corporate Companies accept the deposit in case of Company Fixed Deposit. Regarding the possible return on interest, the FD Return Calculator will tilt towards the corporate fixed deposit. In FDs, you should be happy with the average interest that banks and NBFCs assign from time to time. On the other hand, in CDs, not only is there a guaranteed return, but the rate enhances if you are depositing a larger value. Besides, you can consider reinvesting the interest to make your capital grow, consequently fetching substantially higher capital gains.
CDs with top companies are as stable as FDs
The stability and security of CD depend on the company’s performance, adding some volatility to your corpus. However, it is not subjected to market risks such as stocks and mutual funds. On the other hand, companies taking deposits from the public needs to comply with certain regulations and keep a reserve to safeguard the interest of depositors. As such, CDs are stable investment tools with similar earning potential in high-risk investment tools at significantly lower investment threats.
Possibilities to get something extra over the commitment
When you opt for the Fixed deposit, you accept to be paid interest at an average rate, intimated at the time of making the deposit. This rate will never change unless RBI declares changes in the bank lending rate. On the other hand, investing in CDs, besides the guaranteed return, you can always expect a cut of the additional profit made by the company. It can fetch some significant amount over and above the committed return.
FDs or CDs- what offers better liquidity?
You have to be prepared for the unplanned expenses that come your way. In such a situation, you might need hard cash. Therefore, it is important to consider the liquidity factor of your investments so that you don’t compromise your exigent cash need. The head-to-head comparison between FDs and CDs is at similar standing. In such cases, you can approach Bajaj Finserv with your Corporate deposit certificate to avail of cash loans on simple terms and conditions. When you pledge such collateral towards your loan, you can expect the fastest approval and Disbursal and the most competitive interest rates.
Investment Tenure and premature withdrawal penalty
The lock-in for traditional FDs can span up to 5 years at a go. While for conventional fixed deposit, you can go for a much longer span. So, if you are looking for a mid-term investment tool, CDs make a perfect choice. You will always have the option for premature withdrawal. However, the company always has the discretion to levy any penalty on the withdrawal. Usually, you are exempted from paying such penalties if you prematurely withdraw the CDs within 6 months from the date of deposit. On the other hand, in conventional FDs, you will inevitably need to pay the penalty.
The points stated above establish that Corporate Deposits schemes with top companies are the perfect choice to make your money grow much faster. However, contrary to traditional Fixed Deposits, you will not get any tax benefits from such investments. If you are in the position to embrace a slightly more investment risk and make your fund grow faster, Corporate FDs are the best investment tool to consider.