Company Fixed deposits earn a fixed rate of return over a period of time. Financial institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilized are governed by the Companies Act under Section 58A. These deposits are unsecured, and hence incase of any default by the company, the investor cannot sell the company to recover his capital, thus making it a risky option of investment. Company Fixed Deposits are adequate for regular income with the option to receive monthly, quarterly, half-yearly, and annual interest income. Moreover, the interest rates offered are higher than banks. Performance of the companies should be reviewed at maturity. This helps in deciding whether the deposit should be renewed or not. One should also keep track of these companies by checking their Balance Sheet, Share prices

The Fixed Deposit schemes are offered by

  • Manufacturing Companies
  • Government Companies
  • NBFC’s/ Housing Finance Companies

Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

What is Insurance?

It is a contract between the insured and the insurance company whereby the insured financial risk is covered by the insurance company. The risk can be of your vehicle, property, legal etc. So effectively, you pass on the risk to the insurance company and they charge you a nominal sum of money for taking that risk which is called Insurance Premium

An entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter.

A person or entity who buys insurance is known as an insured or policyholder.

The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer’s promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or preexisting relationship.

Mutual Funds are among the hottest favourites with all types of investors. Investment in mutual funds ranks among one of the preferred ways of creating wealth over the long term. In fact, mutual funds represent the hands-off approach to entering the equity market. There are a wide variety of mutual funds that are viable investment avenues to meet a wide variety of financial goals. This section explains the various aspects of Mutual Funds.

What is Mutual Fund and Why Mutual Fund …?

  • Mutual fund is the trust that pools the savings of a number of investors who share a common financial goal.
  • Anybody with an investible surplus of as little as a few hundred rupees can invest in Mutual Funds.
  • The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme’s stated objective.
  • It gives the market returns and not assured returns. In the long term, market returns have the potential to perform better than other assured return products. Mutual Fund is the one of the most cost efficient financial products.

Advantages of Mutual Fund

Professional Management Diversification Convenient Administration Return potential Low cost Liquidity Transparency Flexibility Choice of schemes Well-regulated Tax benefits

How Do I make money from MF..?

Capital appreciation:

As the value of securities in the fund increases, the fund’s unit price will also increase. There would be capital appreciation when you sell your available units at a price higher than the price at which you bought.

Coupon / Dividend Income:

Fund will earn interest income from the bonds it holds or will have dividend income from the shares.

Income Distribution:

The fund passes on the profits it has earned in the form of dividends


As the value of securities in the fund increases, the fund’s unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought. Although – Mutual Fund does not guarantee the same or does not guarantee returns.

Selection Process…

Step 1 Identify your investment needs

  • What are my investment objectives and needs?
  • How much risk am I willing to take?
  • What are my cash flow requirements?

Step 2 Choose the right mutual fund.

  • The track record of performance over the last few years in relation to the appropriate Benchmark and similar funds in the same category.
  • How well the mutual fund is organized to provide efficient, prompt and personalized service.
  • Degree of transparency as reflected in frequency an d quality of their communications.

Step 3 Select the ideal mix of schemes

  • Investing in just one scheme may not meet all your investment needs.
  • You may consider investing in a combination of schemes to achieve your specific goals.

Taxation benefits

The amount invested in tax-saving funds/Equity Linked Saving Schemes (ELSS) is eligible for deduction under Section 80C upto a limit of Rs.1,00,000/- (in a financial year).

  • Dividend from Mutual Fund Schemes is Tax-Free in the hands of the Investor/recipient.
  • Indexation Benefit under Long term Capital Gain in Debt schemes.

Risk …

  • Risk is an inherent aspect of every form of investment. For Mutual Fund investments, risks would include variability, or period-by-period fluctuations in total return.
  • Market risk: At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. This change in price is due to ‘market risk’.
  • Inflation risk:Sometimes referred to as ‘loss of purchasing power’. Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you’ll actually be able to buy less, not more.
  • Credit risk: In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?
  • Interest rate risk: Interest rate movements in the Indian debt markets at times can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the NAV.

Other risks associated are:

Investment risks

Liquidity risk