Ground Rules before you plan for Fixed Deposits!

Over the last few months many companies have observed that the demand of Fixed Deposits has considerably gone up after the inflation entered into double digit territory making the banks offer not a very great deal of return.

Here are a few things that you should consider before investing in any company:
Can you part with the money: Before investing in a company you should ask for yourself  whether you can actually part with the money for the term you have chosen for the deposits, this is because compared to MF’s or bank FD’s, corporate FD’s are not very liquid.

Does the name ring a Bell? : Before investing it is always advisable to check with your financial adviser about the credentials of the company. You can always check with the ratings in order to see where the company stands.

Know the Risk: Just like the stock market, the company deposit space is also inhabited by a variety of species, depending on which the interest rates could vary.

How much should you invest?: Remember one thumb rule ‘ Never put your eggs in one basket’, just because a company is offering better interest rate you need not rush in to put in your entire corpus. It always makes sense to diversify your investment.

Source: Economic Times