Company deposits - a calculated risk

I posted about the deep discount bonds last time, that assumes that you have money for long term debt options. While most people will suggest that if you are ready to lock funds for periods like 10 years, then go for equity, my suggestion is to keep a healthy mix of debt and equity unless you are a very short term investor (defined as 1 year horizon).

I am also assuming that you have already looked at the standard options like the Bank FDs, Post office schemes etc.

The other option available if you are open to a higher degree of risk is you should be looking at some company deposits to bolster your portfolio returns. Keep in mind that most of the company deposits are unsecured in nature and any loss will land you with Zero money in most cases. having got that flag away, lets focus on how you can add this thing to your portfolio - 2 sites which seem to have a good list are moneypore and Bajaj capital. Check only companies which are profit making and have a history of dividend payment and long history of fixed deposits. As per law, a statutory adevertisement is to be released by the company, check this out, this gives information about the company, its history and operational details etc. My personal tenure for most of these is 1 year, I usually review the companies performance and review whether I need to renew or not. Always check the credit rating for the instrument. If there is no credit rating ( not probable) or has not been revealed steer clear.

What can you expect from these investments - maybe +1 to +2 % on interest rate on AAA rated instruments for a year over the bank deposits, but in the current scenario the gap has reduced.

I will post about that new kid on the block Fixed Maturity plans next, keep reading....