Think good returns and safety are a misnomer? Think both these words don’t go hand in hand? Then think again. It is possible to get good returns without taking undue exposure to risk. Here is how.

• Company FDs: The FDs offered by the companies offer higher returns as compared to the bank FDs. However they are also riskier than bank FDs. So always select the FDs that carry at least A+ ratings or those offered by top corporates like Tata Motors, HDFC etc. It will ensure your capital is safe.
• PPF: PPF is one of the best means of earning good returns safely. You not only get 8.5% interest on the corpus invested, it is also completely tax-free for you. Both the interest earned and capital withdrawals do not attract any tax, thus increasing your returns.
• PO Monthly Income Scheme: Here you not only get an interest of 8% per annum, you also earn 1% bonus at the end of the term This interest will be credited to your bank account, every month, thus giving you a monthly income. It is ideal for retired people or people looking for additional income.
• FMPs and short-term income funds: These are excellent alternatives for people eager to take slightly higher risk in order to earn higher returns. You can expect a return of 8-8.5% for a period of 1-3 years.

While all these means offer good returns, always remember that it is the ultimate combination of equities, gold and debt that will help you achieve the highest possible returns.

Many people find company deposits lucrative due to the higher rate they pay on the FDs as compared to bank FDs. However this high return also comes with high risk. The major risk in case of a company FD is that if the company is unable to repay your money, you end up losing it. But in case of banks, your money is safe as the bank FDs are insured up to Rs. 1 lakh. So in case the bank becomes insolvent, you are sure to get your money back.

So how do you protect yourself when investing in company FDs? For one, opt for bank FDs having a credit rating of at least A+. These ratings are given by rating agencies like ICRA and CRISIL. A+ ratings implies the FD is safe.

Find out the company’s record in making repayment on time. Check the company promoters’ record. E.g. it is always better to opt for FDs from companies like Tata and L&T. Stay away from companies with unknown promoters, even though they may be offering higher rate of interest.

Follow these tips to ensure your money in company FD is safe.