Which companies can accept fixed deposits in India?

All types of companies in India are not allowed to raise money through the acceptance of fixed deposits in India. In fact, only the companies that are registered under the Companies Act 1956, such as:

1) Non-Banking Finance Companies or NBFCs

2) Manufacturing Companies

3) Housing Finance Companies

4) Financial Institutions

It must be remembered that company fixed deposits by nature are not secure fixed deposits and hence the authorities do not allow all types of companies to raise money through Fds.

In fact, company fixed deposits are high risk deposits and hence, utmost care must be taken, since the money is not secured against the asset of the company.

In India it's best to put money in companies that have been highly rated by rating agencies. Companies with a "AAA" rating have lesser chances of default and hence one must invest in the fixed deposits only of these companies.

While choosing a company fixed deposit to invest in one must also look at the financials, including cash flow of a company, dividend payment track record, check also for the past track record of servicing debt etc.

Interest on company fixed deposits are generally higher than that of bank deposits, though bank deposits are very secure set of instruments.

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