Ever wondered why government bonds pay the lowest interest? Because they are the safest. That is why a real-estate company will have to offer interest rates on its corporate deposits much higher than a bank FD to get your money. They are offering a higher interest as a sweetener for the higher risk you take. You must remember this each time you are offered a company deposit or a ‘scheme’ that offers you very high interest rates. The higher the return it promises, the higher is the risk – even in a product you think is ‘safe’ like a company deposit.
