Monday, April 5, 2010
Key points to know before investing in FDs
Over the past one year, it is witnessed that fixed deposit interest rates from nationalized banks have gone down from 8-9 percent to around 6-6.5 percent now for a period of 1-3 years.
Aseem Dhru, Managing Director and CEO of HDFC Securities, which has recently started distributing company fixed deposits, said, "With fixed deposit rates from banks coming down, investors seeking higher returns from fixed income products are investing in company fixed deposits."
Here are some key points one needs to know while investing in company fixed deposits:
Security
Company fixed deposits are unsecured. In case of bank fixed deposits, the Deposit Insurance and Credit Guarantee Corporation of India guarantees repayment of Rs.1 lakh in case of default. There is no such guarantee offered in company deposits and the safety of your deposit depends on the financial position of the company.
This means, as a depositor, you have no lien on any asset of the company, in case it goes into financial difficulties and is wound up. Your turn to get your money back would come only when secured lenders have been paid. So do not invest in unknown companies.
Risk v/s return
Today, investors could expect around 5-8 percent from income funds, depending upon whether it's an ultra liquid fund or a long-dated income fund. Schemes like the post office NSC and PPF give you a eight percent return, but are locked in for six years and 15 years, respectively.
You can check with distributors or with friends about the credentials of the promoters and their past track record. Opt for companies that pay dividends and are profit making. Avoid loss-making companies or those who do not pay dividends. If a company has made a one-off exceptional loss in a particular year, but has a good parentage and past track record, you could consider it.
Liquidity
Most companies accept fixed deposits for a period ranging from 1-5 years. Compared to mutual funds or bank fixed deposits, company fixed deposits are rather illiquid. In most cases, premature withdrawal is not allowed before completion of three months. If one wishes you wish to withdraw between the third and the sixth month, you get zero interest income.
If one wishes to withdraw between the sixth and the 12th month, he/she gets three percent less than the guaranteed return
Aseem Dhru, Managing Director and CEO of HDFC Securities, which has recently started distributing company fixed deposits, said, "With fixed deposit rates from banks coming down, investors seeking higher returns from fixed income products are investing in company fixed deposits."
Here are some key points one needs to know while investing in company fixed deposits:
Security
Company fixed deposits are unsecured. In case of bank fixed deposits, the Deposit Insurance and Credit Guarantee Corporation of India guarantees repayment of Rs.1 lakh in case of default. There is no such guarantee offered in company deposits and the safety of your deposit depends on the financial position of the company.
This means, as a depositor, you have no lien on any asset of the company, in case it goes into financial difficulties and is wound up. Your turn to get your money back would come only when secured lenders have been paid. So do not invest in unknown companies.
Risk v/s return
Today, investors could expect around 5-8 percent from income funds, depending upon whether it's an ultra liquid fund or a long-dated income fund. Schemes like the post office NSC and PPF give you a eight percent return, but are locked in for six years and 15 years, respectively.
You can check with distributors or with friends about the credentials of the promoters and their past track record. Opt for companies that pay dividends and are profit making. Avoid loss-making companies or those who do not pay dividends. If a company has made a one-off exceptional loss in a particular year, but has a good parentage and past track record, you could consider it.
Liquidity
Most companies accept fixed deposits for a period ranging from 1-5 years. Compared to mutual funds or bank fixed deposits, company fixed deposits are rather illiquid. In most cases, premature withdrawal is not allowed before completion of three months. If one wishes you wish to withdraw between the third and the sixth month, you get zero interest income.
If one wishes to withdraw between the sixth and the 12th month, he/she gets three percent less than the guaranteed return
Fujifilm launches series of digital cameras in India
FUJIFILM India has announced the launch and availability of 14 digital camera models into the Indian market. FUJIFILM has launched four new models of its 'A series' compacts (AV100, AV150, AX200 & AX250) featuring high definition (HD) image and video capture for the first time on entry-level cameras.
These are easy-to-use and are ideal for people who are investing in their first digital camera. Offering a combination of various mega pixel resolutions, Fujinon zoom lenses and LCD screen sizes, consumers will be able to choose a camera that perfectly suits their needs and budget, one that features all of FUJIFILM's advanced technologies such as Automatic Scene Recognition, Face Detection, Digital Image Stabilization, high ISO sensitivity levels, Picture Search (as per the scene mode), and Panorama Shooting Mode which allows users to stitch three photos together to create a panoramic image (perfect for wide landscapes, tall buildings or large groups of people).
FUJIFILM has also launched four sleek models of its 'J series' family cameras (JV100, JV150, JX200 & JX250) that come with sculpted and sophisticated looks, and enable users to shoot images in HD. These cameras are loaded with advanced features like razor sharp Fujinon zoom lenses, Scene Recognition Auto, Panorama Shooting Mode, Movie Mode with Sound, Picture Search etc. The Smile & Shoot Mode works with FUJIFILM's highly-acclaimed Face Detection technology to detect smiles on faces. It will not take a picture until it detects a smile. Another new feature is Blink Detection which warns users if they have captured an image with people blinking, so that they can re-shoot if necessary. The newly launched JV and JX models have a new feature - Targeting AF - which is perfect in case users need to take a picture of a moving subject and can't keep the subject in the frame. As and when Targeting AF is switched on, it tracks the subject and ensures pictures with the subject in the centre of the frame in perfect focus.
These are easy-to-use and are ideal for people who are investing in their first digital camera. Offering a combination of various mega pixel resolutions, Fujinon zoom lenses and LCD screen sizes, consumers will be able to choose a camera that perfectly suits their needs and budget, one that features all of FUJIFILM's advanced technologies such as Automatic Scene Recognition, Face Detection, Digital Image Stabilization, high ISO sensitivity levels, Picture Search (as per the scene mode), and Panorama Shooting Mode which allows users to stitch three photos together to create a panoramic image (perfect for wide landscapes, tall buildings or large groups of people).
FUJIFILM has also launched four sleek models of its 'J series' family cameras (JV100, JV150, JX200 & JX250) that come with sculpted and sophisticated looks, and enable users to shoot images in HD. These cameras are loaded with advanced features like razor sharp Fujinon zoom lenses, Scene Recognition Auto, Panorama Shooting Mode, Movie Mode with Sound, Picture Search etc. The Smile & Shoot Mode works with FUJIFILM's highly-acclaimed Face Detection technology to detect smiles on faces. It will not take a picture until it detects a smile. Another new feature is Blink Detection which warns users if they have captured an image with people blinking, so that they can re-shoot if necessary. The newly launched JV and JX models have a new feature - Targeting AF - which is perfect in case users need to take a picture of a moving subject and can't keep the subject in the frame. As and when Targeting AF is switched on, it tracks the subject and ensures pictures with the subject in the centre of the frame in perfect focus.
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