After a month of hard work in the office, I decided to spend my weekend without any work with my family. Being a Chartered accountant is not an easy task when everyday you need to underpass many laws and satisfies n number of clients with their taxes and investment. Hence, after a long time, I chose to enjoy the sun of winters with my family rather playing with boring numbers.
As said, I was relaxing on the terrace of my home with friends and family, when my chacha ji initiated a very long debate on the work of finance minister Arun Jaitley. He himself is a big fan of Narendra Modi but when it comes to financing, Arun Jaitley is not his ideal choice. He told me that the polices of this man is not good. Prices of vegetables are going up each day and interest in a bank account is decreasing day by day. He further said that people income is decreasing and inflation is increasing and hence shrinking the pocket of middle class families.
After listening to him, I realize that through he was a little bit frustrated with the decreasing income due to cut in interest rates, but he has a valid point. Inflation is increasing far more strongly than the income of people and hence the real income is decreasing. The foremost reason behind this problem is that matured people only invest in fixed deposits with banks and nowhere else and when it comes to returns, fixed deposits is no more a safer choice.
After thinking a lot, I replied to Chacha ji that why you don’t try other options of safe investment with higher returns like mutual funds,FD with Nidhi Companies etc. He instantly asked me what Nidhi Company is. Is it a government scheme?
He only asked me about Nidhi Company because he knows a little bit about the mutual fund, but Nidhi Companies is very new to him. So he asked with curiosity.
Let me now explain everything about the FD under Nidhi Company, so that like my chacha ji everyone of you will be able to understand the whole concept and can earn 12% on fixed deposits.
What is a Nidhi Company?
Nidhi Company is a public limited company registered and governed by Nidhi rules, 2014 as drafted by the Ministry of Corporate Affairs (MCA). Nidhi Company is a finance company which deals exclusively with their members and hence, anybody who wants to transact with Nidhi Company, first needs to become the member of Nidhi Company with zero or nominal membership fees.
What Nidhi Company actually does?
Nidhi Company is one of the types of Non Banking Finance Company (NBFC), which deals like a bank. It accepts deposits from members and lends money to members same like a normal bank does.
Why Nidhi offers 12.50% interest on fixed deposits?
Nidhi Company needs funds and if they provide same interest as provided with banks, then no one will deposit the funds with them and hence, Nidhi Company gives you better return so that you can earn better on the fixed deposits parked.
What amount of risk is involved?
Nidhi Companies are managed by few individuals and hence bit risky affair. However, if you park your funds in large Nidhi companies, then your money will be reasonably safe. Never ever park your funds with the local Nidhi companies, because those companies often cheat with people. You can always park your funds with large Nidhi companies and earn 12.5% interest on fixed deposits.
Further, don’t even park your funds with Nidhi that are managed even by your relatives because small Nidhi often loses money because of poor management.
What other services are offered by Nidhi Company?
Nidhi Companies offers varieties of services and more importantly, it targets that community of people which are rejected by banks. Here are following services provided by Nidhi Company in India:
Saving account: Nidhi Company also offers the saving account services by offering interest rate at 6% per annum.
Recurring deposits: Nidhi Company offers recurring deposits account services, where monthly investment is to be made which cumulates with interest of 12%.
Instant loans: Nidhi Company also lends money without any difficult documentation and hence, people without ITR can also get loan very easily.
We have tried to explain you the benefits of Nidhi Company where people can earn more instead of 6 to 7% FD with banks. However, you must stay cautious while investing in these companies. Invest your precious money only when you are 100% sure. You can reach us at firstname.lastname@example.org.