Things to know before investing in a company fixed deposit | Fusion - WeRIndia

If you have decided to invest in a company fixed deposit, it is important to know that it is a risky business. This is because if a company is doing badly, there could be a default in payment of principal and interest. Here are few important things to remember before investing in company fixed deposits.

Credit rating

Before investing in a company fixed deposit, always check its credit rating. Companies with high credit rating indicate safety with regards to timely payment of interest and principal. ‘AAA’ rating is the highest a company can receive.

The track record of company

Research the track record of the company to see if it is constantly paying dividends. If its track record is good, you can invest.

Interest payment

There are various options of interest payment in company fixed deposits. You can choose a monthly, quarterly, or an annual option. Choose the best option according to your needs.

Early withdrawal

Check the terms and conditions for early withdrawals. Ensure what you would lose in case of early withdrawal. Some companies do not even allow withdrawal before a period of three months.

Choose ECS

If you want regular interest payments, then go for ECS payment. If not you would have to wait for your cheque and then have the same deposited in the account.

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