Consumer Voice - - Company Fixed Deposits -

CFDs are ex­empted from de­posit in­surance un­der the pro­vi­sions of Com­pa­nies (Ac­cep­tance of De­posits) Rules, 2015. This se­verely dents the safety fac­tor of the amount in­vested with the com­pany, es­pe­cially when the com­pany winds up due to bank­ruptcy or re­ports huge losses. CFDs are cat­e­gorised as un­se­cured in their books of ac­counts, which means that in the event of wind­ing up of the com­pany, the re­pay­ment of such CFDs to the in­vestor ranks very low in pri­or­ity. Most of the CFDs give very lim­ited op­tions – viz. 1 year–3 years un­der Scheme A (fixed de­posit scheme) and 3 years–5 years un­der Scheme B (cu­mu­la­tive [fixed] de­posit); hence in­vestor choices/op­tions to in­vest for var­ied pe­ri­ods are lim­ited.

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