Invest in high quality company fixed deposits, says financial advisors

MUMBAI: With interest rates expected to fall further, financial advisors are asking investors to lock their surplus funds in company deposits that pay higher higher interest rates.

"Fixed income investors could take advantage of the current high interest rate scenario and invest in companies with a high rating and pedigree in line with their time horizon," says Jyotheesh Kumar, Senior VP, HDFC Securities.

Investment experts are recommending deposits from companies such as HDFC Ltd, Shriram Unnati, Mahindra Finance, LIC Housing Finance, among others. HDFC Ltd is offering an interest rate of 9.4 pc, Shriram offers 10.75 pc while Mahindra Finance offers 10.25 pc and LIC Housing Finance offers you a return of 9.5 pc.

All these companies have strong financials and reputed promoters. Experts caution investors not to be greedy and invest in fixed deposits of mid cap companies for higher returns. “Though mid cap companies may pay extra interest rates of 200 basis points or 2 pc, one must understand that it comes with higher risk,” says Anup Bhaiya, MD and CEO, Money Honey Financial Services.