There is a wide range of products available for the investors. The suitability of a product needs to be evaluated on various parameters like risk, asset category, duration, ease of investing, liquidity and complexity.
Corporate Fixed Deposits
Fixed Deposits in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. Financial institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by the Indian Companies Act under Section 58A.
These deposits are unsecured, i.e., if the company defaults, the investor cannot sell the documents to recover his capital, thus making them a risky investment option. Like most investment options, Company Fixed Deposits are a mixed bag. Company FDs can be an interesting investment option if you know how to select the right FD, and how to avoid the no-so-good ones.