Dividends income versus Interest income via Fixed Deposits

Interest income that are fetched through Company Fixed deposits or traditional Bank Fixed Deposits(FD) what are advantage of having allocation in Dividend investments.

Dividend Investments

• Distribution yield varies as per company earnings and Dividend is last part of company payment(first Employees,Creditor Interest payment and leftover is Dividend distribution)
• Non taxable upto 10Lakhs(1million INR) in the hands of investor, above 10Lakhs taxable
• Dividend distribution tax applicable even to Companies distribute dividends.
• Dividends are sensitive to Interest payments done by the company to its creditors.
• Longer Horizon dividend might increase and tend to be free of cost investment and also continue to receive dividends there after.
• Depends on the specific company and sector or economic proof sector.
• unstable company or any specific earning miss out in year goes without DPU.
• Risk involved but one needs to check before investing
• Ownership in the company or in Bank if you are shareholder of the company.

Traditional Fixed Deposits

• Stable and fixed income.
• Taxable.
• longer Horizon interest might fall
• Depends on the specific country economy.
• Inflationary pressure
• Unstable company & Banking leads to default in interest payment.
• Low Risk(but risk coverage is only for 1Lakh per bank/person) as per RBI norm.
• No Ownership in Company or Banks

now you see the benefits of Dividend investment why don't you start Dividend Investment Journey.