Fix Deposits by Companies ... 3

Advantages:

1. Variety of Deposit Scheme to Suit individual needs.
2. Reasonable Return
3. Liquidity
4. Moderate Safety
5. Good Service & Response

Disadvantages:

1. Deposits are unsecured.

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Fix Deposits by Companies ... 2

Differences between Manufacturing companies and Finance companies,

Manufacturing Companies: Manufacturing Companies are permitted to mobilize deposits from the Public up to 25% of their net worth and up to 10% from their Share Holders. They can accept deposits for a Minimum Period of 6 Months and a Maximum of period of 36 Months. Interest will be paid on Monthly, Quarterly, Half-yearly, Annually & on Maturity. (cumulative). Investor can withdraw the deposits before the maturity. In this case he gets the interest till date, but less penalty which is usually 1% or 2 %  Finance Companies: Finance Companies are permitted to accept deposits based on their credit rating issued by any of the agencies like CARE, ICRA,CRISIL and FITCH. They can accept deposits for a minimum period of 12 months and a maximum period of 60 months. Interest will be paid on monthly, quarterly, half-yearly, Annually & on maturity. (cumulative). Deposits with highest /high rating companies are safe. They may offer an Interest rate between 9 % & 11%. Investors can avail a loan up to 75% of the amount invested and also allowed Premature withdrawal.

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Fix Deposits by Companies .... 1

Fixed Deposits mobilized by companies are governed by the provision of Section 58-A of the Companies Act 1956. The Fixed Income instrument provides Fixed/committed return on the amount invested and is the most convenient investment options to all investors. Fixed Deposits can be classified into deposits received from,

1. Manufacturing Companies ( Non Banking-Non Finance Companies)
2. Non Banking Finance Companies (NBFC)

Points to consider before choosing companies:

• Go for the company which is in operation for at least 10 years.
• The company should be a Public limited/Government company.
• The company should be a prior maturity and dividend paying company.
• Check out the management of the company, it should be known and well established management.
• Do go through track record of the company.
• And last but not the least, in fact most important check out rate of interest offered by the company.

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