Corporate Fixed Deposits offer high interest rate, know what are the benefits

In the last one year, the interest rate offered by leading banks on fixed deposits has fallen by about two per cent. This is reducing the attractiveness of investors towards FD. In such a situation, experts recommend investing in corporate fixed deposits. Corporate FDs can avail interest rates of up to 2 percent more than bank FDs.

However, corporate balance sheets are also under stress due to financial stress caused by the coronavirus epidemic. Therefore, experts say that one should remain selective while investing in corporate FDs. Experts recommend investors to invest only in corporate FDs rated AAA to ensure the safety of capital. Currently, AAA-rated corporate FDs are offering interest rates between 6 and 8 per cent depending on the investment tenure.

Mortgage lender HDFC is currently offering a 6.20% interest rate on FDs of 15 months duration. At the same time, Bajaj Finance is offering 6.9 percent interest rate on FDs of 12 to 23 months. Both of them come with a corporate FD AAA rating. This means that your capital security is the highest in this.

Corporate FDs offer higher rates of interest to customers, but here premature withdrawal rules are very stringent. Pre-matured withdrawals are not allowed in the first three months of deposit in corporate FDs. After the first three months, different companies charge different fees on pre-mature withdrawals. For example, HDFC Limited pays only three per cent interest on pre-maturity withdrawals after three months and before six months. On pre-maturity withdrawal after six months, HDFC pays one percent less than the interest rate applicable for the period.

What is Corporate FD

Corporate deposits are issued by a company rather than a bank. Their maturity period is usually from six months to three years. Here the interest rate is higher than bank FD. The risk in corporate FDs is higher than that of bank FDs, as they are related to the business of companies. However, higher-rated corporate FDs have lower risk and increase investor safety of capital.

Satisfactory Investment

During the Corona period, there has been a decline in economic activity globally and there is an eclipse of the recession on the economies. India is also not untouched by negative effects, but foreign investment is growing at a satisfactory pace due to the efforts of the government. Prime Minister Narendra Modi in an address has given encouraging information that in the period of lockdown imposed to prevent the spread of infection, there have been twenty billion dollars of foreign direct investment in the country.

This indicates that despite the decrease in growth rate, the confidence of investors on the good future of our economy is restored. This investment is also important because many types of apprehensions were arising due to the massive fall of investment in April. The comprehensive relief package issued by the central government and efforts to prevent infection has also boosted the confidence of investors. As Prime Minister Modi has underlined, the amount of foreign investment is increasing significantly year after year. An investment of $ 74 billion was received in the financial year 2019-20, which was 20 percent more than in 2018-19.

According to the report released last month by the United Nations Committee on Trade and Development, India was ranked ninth in the list of countries receiving the most FDI in 2019. India was ranked 12th in the year 2018. This report also states that India is attracting investment even during the Corona epidemic and is in the strongest position among the South Asian economies. In order to overcome the Corona crisis and make India prosperous, Prime Minister Modi has given a mantra of self-reliance and called for increasing production and consumption at the local level.

 In his recent address, he has also emphasized that it is necessary to increase the domestic capacity of production, restore the health of the financial system and diversify its international trade to withstand external shocks such as disasters. Due to economic reforms, changes in regulation and important legal initiatives, India's performance in terms of trade facilitation is continuously improving.

 Taking advantage of the current crisis experiences and changes in the structure of global commerce and trade, India has the potential to become a major economic presence. The size of the Indian market is also huge with the availability of resources and labor. If the flow of appropriate

Why Liquid Funds?

Why Liquid Funds?

When it comes to secure surplus cash while escaping the tide of eventuality, most of us prefer bank accounts. The intent is right; however, as a thumb rule, you don't need more than a month or so of your income in your bank account. Anything more and you are loosing out the opportunity to deploy your funds better. 

One should consider Liquid Funds to fetch better returns within a short period of time. These funds refer to a category that invests in a basket of different securities like treasury bills, government securities, corporate paper securities and call money that holds least amount of risk and high credit ratings. These funds can invest upto a maturity of 91 days. Unlike other mutual funds, the NAV of liquid fund is not volatile and the only change in their NAV is mostly as a result of the interest income that across.

Here are the major benefits you get from Liquid funds

Return Efficient: No longer waiting for achieving returns as you can be eligible to earn interest from the date of the investment itself and thus minimize the overall return leakage.

Effective Cash Management: Businesses can park their daily surplus in liquid funds to earn interest on the same rather than keeping in bank accounts.

Quick Withdrawal: Liquid funds allows investors to withdraw a portion of their liquid money any time to fulfil any kind of emergency requirements.

No Lock in Period: There is no lock in period in liquid funds and hence give the instant access to funds

Retirement Plan can succeed through Mutual Fund Investment

Retirement Plan can succeed through Mutual Fund Investment

It's well said, "Effective Planning for your Retirement in early stages helps you to build strong financial balance after retirement". Who doesn't look forward to achieving a comfortable life after retirement? After all, life is all about ending up with happiness. To pursue such happiness, you need to have some retirement corpus and as well as a steady flow of income to meet your every requirement.

Why Mutual Fund is the Ultimate Avenue for your Retirement Plan?

It is best to have an employee of Central Government as they take care of your future and sorts out your all retirement aspects financially. The scenario comes different when you are a Private Employee as you are not guaranteed to have a comfortable life in your older days. Mutual Fund is one of among those Avenues through which you can make hassle-free retirement while beating the inflation. 

In simple term, mutual fund accumulates money from different investors and puts them on different money market instruments such as equity, stocks and debts. If the investment goes on for a long time with consistency, offers high returns and helps to build a high corpus for your retirement.

Benefits of Mutual Fund Investment for Retirement Plan

• You will be getting the best recommendation from the Retirement Plan advisor regarding your retirement plans and schemes.
• Mutual Fund for Retirement Plans is more tax efficient than pension plans.
• The transparency in mutual funds is higher than those of pension plans as you can access your desired information regarding mutual funds. 
• Mode of Payment is Easy and Convenient.

Considerations for Mutual Fund Investment

Considerations for Mutual Fund Investment

1. Time Impression

For investing in Mutual Funds, the first thing you need to consider is the time impression. More you give time to your funds, bulkier the returns will be. However, you will be benefited with some amount but cannot expect life-changing goals. To acquire this, you need to be very patient and think for the long term goals.

2. Make your Investment Goal Straight and Clear

Considering the objective of the investment to meet the financial goal can likely tend to go a long way. This can help you to decide how much you can invest in mutual funds while accepting the risk appetite. Investment always works well with a purpose and concentration

3. Pick The Appropriate Investment Type

There are numerous fund types that might confused first-time investors to pick the suitable one. Going with experts recommendation helps you pick up minimal risks fund, basically the balanced or debt fund that also eligible enough to give you higher returns.

4. Choose SIP Investment Instead of Lumpsum

Systematic Investment Plan (SIP) is better for the beginner-investors for investing in equity-oriented funds as it allows you to diversify your investment over time so that you can be able to invest at various market levels. Apart from this, SIP provides you with good returns compare to Lumpsum Investment.

5. Update KYC Documents 

Make sure that your KYC is up-to-date so that you can become KYC-complaint. For that, you must have a Pan Card and valid address proof. Download KYC Form.

Steps for Investing in Mutual Funds

Step 1: Register Yourself at https://www.vedantasset.com/pages/register.aspx

Step 2: Enter the credentials such as Name, Email address, Mobile Number.

Step 3: After entering the password and accepting the Terms & Conditions, Hit the Register Button.

Step 4: Now you will be successfully able to access your dashboard.

SIP: A Dynamic Investment Plan For Investors

SIP: A Dynamic Investment Plan For Investors

SIP or Systematic Investment Plan has gained extensive popularity among investors in the last few years. The SIP growth gets a boost when demonetization occurs and campaigns like "Mutual Fund Sahi Hai" also acquainted people with the SIP's benefits. A SIP is an investment planning tool that is completely different from the mutual fund schemes. It allows investors to invest regularly in mutual fund schemes, typically in an equity mutual fund schemes. An investment under SIP will help you to make your funds stagger over a period of time. This tool gives great flexibility to the salaried investors to achieve their financial goals as it filters the burden of investing a lumpsum in equity mutual funds. Investors can simply invest a fixed amount on a regular basis over the period through SIP and it happens as per the choice of investors itself. 

Benefits of SIP

• Investing in the fixed pre-defined amount on a regular basis for a long time helps to reduce the overall risk as it absorbs the market volatility to a certain extent.
• The initial investment you just need to start SIP is only Rs 500. Therefore, you can also get the flexibility to average your purchase cost.
• It teaches investors to invest in a disciplined and phased manner and ensures better long-term benefits compared to lumpsum investment.
• You can make your investment healthy by investing in SIP as you are allowed to buy more units in a low market situation.
• You can customize the way you put money in SIPs as it allows you to increase or decrease SIP amount periodically.

Want to Invest in SIP!! Go through the SIP Calculator to analyze the returns for the fixed price you may have decided to invest in.

What is a Mutual Fund?

What is a Mutual Fund?

A Mutual Fund is an investment platform build up with the bulk of money accumulated from investors in order to perform investment in different securities like stock, bonds, money market and many other assets. Mutual Funds are managed by professional Money managers who are dedicated to allocating fund assets in appropriate stocks so that it could match the investment objective and eligible to produce appreciable returns.

Mutual Fund also allows investors to manage their portfolio of equities and other securities professionally. Thus, every individual who is a part of a particular investment (shareholders) equally participates in the gain or loss of the capitalization. However it is a risk process to invest your hard-earned money in mutual funds, but if you are fit for holding up the investment for a long-term, then you never going to lose your money. In fact, you may be subjected to achieve higher returns. The securities lie on the mutual fund investment is very extensive and thus, it allows investors to gain important diversification at a very low price.

Benefits of Mutual Funds

• Mutual Fund provides diversification in choosing securities. In order to diversify with the stocks, an investor may need to buy 20 or more securities to reach the diversification requirement. For an individual with a low investment portfolio, many mutual funds also offer complete diversification in a single security that can be easily bought.   
• There are many funds that allow investors to gain access to any market segment so that investors can buy into focused areas of the market.
• Many mutual fund companies also provide an opportunity for an individual for becoming mutual fund advisors to initiate own business chain of investors.

Want to Investment in Mutual Funds?

If you are a beginner in the field of investment, the first thing you need to do is research and identify your investment objective. However, professionals will help you to choose the best fund depending on your requirement, but becoming knowledgeable help you raise out the important queries.

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