To ascertain safety of your principal amount, debt portion is a must-have in an investor's portfolio but should one give in to the FDs by corporate providing yield as high as 11.60 % under the cumulative scheme with 3 year tenure. Here is a take on the new investment avenue option by Future Enterprises Limited.
About the company: Its subsidiary companies include the likes of Big Bazaar, FBB( Fashion Big Bazaar), Home Town etc.
About FD: Minimum investment - Rs. 10,000
Both cumulative and non-cumulative options are available for 1 to 3 year tenures. Under the cumulative offer, the compounding is done on a quarterly basis whereas for regular income, interest is paid out regularly.
|Duration||1 yr||2 yr||3 yrs||1 yr||2 yrs||3 yrs|
|Min deposit||10,000 and in multiples of Rs. 1000 thereof|
|Rate of interest||9.1%||9.6%||10.10%||9%||9.5%||10%|
Eligibility: Individuals should be Resident Indian with PAN. Joint ownership is allowed in the FD account.
Taxation of the income from FD is to be done under the head income from other sources and if interest income exceeds Rs. 50000, then TDS is to be deducted, subject to Form 15G/H as the case may be.
Ratings: Unsecured FEL FDs have been awarded CARE Ratings of AA - (Fixed Deposit), Outlook Stable, that means a high degree of safety regarding timely servicing of financial obligations. But one must note that these ratings can change during the tenure of the instrument.
Further safety in these FDs has been strengthened as some of the companies can raise public deposits and these company FDs are insured up to Rs. 20,000.
But you need to bet on the instrument, only if you can afford a degree of risk appetite.