Fixed income products forms the base of a financial plan. If the base is not strong whatever we build upon it is under risk of collapse, therefore by allocating a higher quanta of funds towards fixed income products improves the overall stability of a portfolio.

Company Fixed Deposits

Company Fixed Deposits are time-bound deposits offered by companies, NBFCs, and financial institutions. They pay a fixed return for a specific period and fall under Section 58A of the Companies Act. Company FDs are unsecured, which means investor capital is at risk if the company defaults. This makes issuer selection the most important step.

Benefits of investing in Company Fixed Deposits

• Higher interest than bank FDs
• Short tenures available
• Minimum lock-in of 6 months
• No TDS up to Rs 50,000 interest per year for individuals
• No TDS up to Rs 1,00,000 interest per year for senior citizens
• Option to diversify across multiple companies

How to Invest Smart

Spread your Risk

Avoid putting more than 10 percent of your money into a single company. Diversify across different sectors.

Choose the Right Period of Deposit

Tenures of 1 to 3 years offer a good balance between liquidity and returns.

Review at Maturity

Check credit ratings, annual reports, and financial performance before renewing or shifting your deposit.

Bonds

Bonds are securities issued by companies, financial institutions, or the government. When you buy a bond, you lend money at a fixed interest rate and for a fixed period.

You receive interest at regular intervals, and the principal is returned at maturity. Bondholders are creditors, not owners, which makes bonds more stable than stocks.

Bonds work well for investors who want steady income and lower volatility.

NCDs (Non-Convertible Debentures)

NCDs are long-term debt instruments issued by companies. They offer higher interest than traditional deposits and are listed on stock exchanges, giving you the option to exit before maturity.

Key Features:

• Higher interest rates
• Fixed payout options (monthly, quarterly, annual)
• Secured and unsecured variants
• Tradable on stock exchanges
• Rated by credit agencies, which helps in assessing risk