INSUBCONTINENT EXCLUSIVE:
Authors: Super User
When the time horizon of your investment is longer than a year, you could choose among a
spectrum of financial assets to park your money in
However, when the time frame becomes shorter than a year, the number of viable savings options gets fewer, especially the ones offering a
In a bid to earn a higher rate of interest, one often gets tempted to put the money in low-rating stocks
This calls for caution and calculated risk
But before one takes a call, one must understand the nuances of investment options and their features in detail
The short-term financial assets include fixed deposits (FDs), corporate fixed deposits, post office term deposits, recurring deposits (RDs),
and sweep-in fixed deposits, among various other not-so-popular financial bets.: NCDs Vs FDs: Which Is A Better Investment Option And
WhyIt's pertinent that one zeroes in on the financial asset on the basis of rate of return on offer, risk involved, credit rating of the
instrument, liquidity, among other factors.Five Popular Short-Term Investment OptionsBank Fixed deposits (FDs): The bank fixed deposits are
the saving instruments that help the depositor make a considerable quantum of return, which is marginally higher than the prevailing rate of
The rate of return is not high but the capital remains extremely secure and safe.The advantages of fixed deposit accounts are similar to
They pay fixed amounts of interest each year and guarantee return of principal at a set date in the future
Both investments are essentially loans that the investor makes in exchange for interest payments.: Post Office Saving Schemes: 5 Key Things
To KnowCorporate Fixed Deposit: A corporate fixed deposit is a debt issued by company sold to investors
Usually, the debt quality is determined by the payment ability of the company, which relates to the money to be earned from its business
In some cases, the company's physical assets may be used as collateral for bonds
They are higher risk in nature when compared to a bank fixed deposits, since they run the risk of the issuer defaulting on repayments
Secured corporate FDs are safer than the unsecured ones, but offer higher returns as well
Since risk and rewards go hand in hand, thee corporate debt typically offer 200-250 basis point higher returns than the bank FDs at any
be opened by an individual
The interest is payable annually, but calculated quarterly
An investor can open an account with a minimum amount of Rs 200 and in the multiple thereof
There is no maximum limit.: Fixed Deposits Vs Liquid Funds: Which Is A Better Choice For YouRecurring Deposits (RDs): Recurring Deposit is a
form of term deposit offered by banks, helping people with regular incomes to deposit a fixed amount every month into their recurring
deposit account so as to earn interest at the rate applicable to the fixed deposits
The recurring deposit matures on a specific date along with all the deposits made every month
Thus, recurring deposit schemes enable the depositors to accumulate their savings by making monthly deposits of fixed sum over a period of
Minimum period of recurring deposit is six months while the maximum is 10 years.: Ten Income Tax-Saving Options Beyond Section 80C
LimitSweep-in Fixed Deposits (FDs): The sweep-in fixed deposit is the default fixed deposit done at the behest of the customer by the bank
when the savings account has more money than the minimum amount
And as and when the customer needs more money, one can ask the bank to the transfer or sweep in funds to the savings account
