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The rising demand for credit in last couple of days has prompted banks to garner funds aggressively through certificates of deposits (CD), bonds, and fixed deposits (FD). The need for aggressive fund raising arose after the surplus liquidity in the banking system dropped sharply from the record high. According to the data compiled by Prime database, banks have so far raised around Rs 42,000 crore through CDs. This was even after the rates on this instruments are rising sharply. The data also showed that Indian Bank, topped the fund raising list via CDs, raising worth Rs 13,550 crore, which was followed by <keyword id="6357149" type="General" weightage="80" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> raising Rs 6,550 crore and <keyword id="62034" type="General" weightage="80" keywordseo="punjab-national-bank" source="Orion">Punjab National Bank</keyword> raising Rs 2,875 crore so far in August. Apart from this, there are various banks such as <keyword id="6354731" type="General" weightage="80" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword> (SBI), Indian Overseas Bank, Indian Bank, Punjab National Bank, <keyword id="46013" type="General" weightage="80" keywordseo="kotak-mahindra-bank" source="Orion">Kotak Mahindra Bank</keyword>, ICICI Bank, among others have increased their FD raised 5-20 basis points across maturities to attract more investors. "As liquidity is draining out in a calibrated manner from the system, banks are compelled to raise funds through CDs and even through fixed deposits. Some banks are offering special rates for higher FD amounts. With growth picking up, we can expect banks to aggressively raise funds from the market," said <keyword id="14789739" type="General" weightage="80" keywordseo="venkatakrishnan-srinivasan" source="Orion">Venkatakrishnan Srinivasan</keyword>, founder and managing partner at <keyword id="14790820" type="General" weightage="80" keywordseo="rockfort-fincorp" source="Orion">Rockfort Fincorp</keyword>, a Mumbai-based debt advisory firm. Banks credit growth has remained in double digits handily outpacing the deposit growth. The credit growth has increased in couple of weeks due to low base effect, small ticket size loans, higher working capital requirements due to elevated inflation and a shift to bank borrowings on account of high yields in the capital market. The bank credit has grown over 14 per cent on-year, as per data on the <keyword id="6354335" type="General" weightage="80" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> showed. Meanwhile, liquidity in the banking system has cropped sharply in last couple of months. Currently, it around Rs 45,000 crore, as compared to Rs 1.30 lakh crore last week. The sharp drop has been witnessed due to payments for government bonds and outflows on account of goods and service tax payments. Going forward, market participants expect banks to raise more funds because credit demand is likely to rise amid festive season. While, rates on the instruments will also rise due to narrowing of surplus liquidity. "This pace may continue with back of credit off take and <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> attempts to normalise liquidity, banks need to meet the demand and get the cheaper sources of funds be available so raising via CD and capital instruments to meet the credit demand and preparing oneself for this ahead of festivals and busy seasons," said <keyword id="261562" type="General" weightage="80" keywordseo="ajay-manglunia" source="Orion">Ajay Manglunia</keyword>, MD and Head Institutional Fixed Income at JM Financial. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/what-should-investors-ask-mukesh-ambani-at-his-companys-agm/articleshow/93727113.cms">What should investors ask Mukesh Ambani at his company’s AGM?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/instagram-is-reportedly-testing-a-new-feature-that-looks-like-an-imitation-of-fast-growing-app-bereal/articleshow/93727321.cms">Instagram is reportedly testing a new feature that looks like an imitation of fast-growing app BeReal</a>

Banks aggressively garnering funds via CDs, FDs amid firm credit off take

When thinking of safe savings, most of us always home in on fixed deposits (<keyword id="6568461" type="CITY" weightage="20" keywordseo="FDs">FDs</keyword>) offered by banks. And rightly so, because such FDs have many advantages, such as: interest rates ranging from 8.5% to 9.5%, tax savings, and the facility of premature withdrawal, if required. But have you ever considered <keyword id="603034" type="COMPANY" weightage="20" keywordseo="corporate-FDs">corporate FDs</keyword>, which offer higher returns? 
 
Recently, some Indian banks reduced the interest rates on deposits by 0.25%–0.75%, which has made corporate FDs even more lucrative. 
 
What exactly are Corporate FDs? 
 Corporate FDs, or non-convertible debentures (NCDs), are similar to bank FDs except that they are offered by corporates and not financial institutions or banks. Corporate FDs are, basically, fundraising exercises through which a corporation raises <keyword id="6354840" type="PERSON" weightage="20" keywordseo="money">money</keyword> for running its business. Here, the investor’s (your) money is used for repaying existing loans, expanding businesses, optimizing business plans, and other similar activities. Some of the popular corporate offering FDs come from Mahindra <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">Finance</keyword>, Gati, DHFL, PNB Housing and Bajaj Finance. 
 
What’s good about Corporate FDs 
The first question on your mind must be: what makes corporate FDs better than regular FDs? And the answer to the same lies in the points below. 
 
· Rate of interest: Corporate FDs offer higher interest rates than those of a bank, in the range 9%–13%. Some companies offer even higher interest rates to senior citizens. 
 
· Credit ratings: Corporate FDs are rated by independent rating agencies, such as CRISIL, ICRA and CARE, which assess the credit worthiness of the issuing companies. On the other hand, credit ratings are not applicable in the case of bank FDs. 
 
· Interest payments: Investors can choose the frequency of interest payments: monthly, quarterly, half-yearly, annually, or on a cumulative basis. This option offers investors with an additional source of income. 
 
Not all is hunky dory about Corporate FDs 
Before you take a plunge in Corporate FDs market, you should measure its pros against the below-mentioned cons. 
 
· FD term: Banks offer multiple term options for investing, starting from 30 days. On the other hand, the typical time frame of a corporate FD ranges from 1 year to 8 years. 
 
· Withdrawals: Bank FDs are easy to withdraw, whereas withdrawing from a corporate FD can take up to a few weeks. 
 
· FD <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">insurance</keyword>: RBI’s Deposit Insurance and Credit Guarantee Corporation (DICGC) insures bank deposits of up to Rs 1 lakh. The same cannot be said though for the Corporate FDs. 
 
· Risk Quotient: Corporate FDs come with higher risk as they are unsecured. If a company defaults, the investor stands to lose significant amount of the invested money. To minimize risk, it is advisable to invest in companies with high credit ratings. 
 
Make a note of, when investing … 
 Before investing in a corporate FD, one of the good initial filters is checking the company’s <keyword id="142429" type="EVENT" weightage="20" keywordseo="Credit-Rating">credit rating</keyword> and the corresponding rating agency. The investor can check the company’s track record in dealing with investors and depositors. Hence, credit ratings and investor goodwill should be the key deciding factors. 
 
Go for the Corporate FD if you: 
 
- are comfortable with lower or no liquidity 
- have seen the credit ratings and are comfortable with the sector and the brand (company) 
- are seeking returns higher than bank FDs 
 
 
Table 1: Pros and Cons 
 
 
 
Table 2: Some of the current corporate FDs 
 
 
Image: Indiatimes 
 
(About the author: This article has been written by Naveen Kukreja, Director, Paisabazaar.com)

Here’s Why You Should Choose Corporate FDs Over Traditional FDs

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<ul class="summary-list"><li>NASA engineers may have found a clever trick to get Voyager 1 talking in ways engineers understand.</li><li>The probe, showing its age, has been sending back garbled data since November. </li></ul>Voyager 1 has taken to improvising in its old age, making it very difficult to understand what it has to say.The probe has sent back a steady flow of gibberish since November, worrying scientists trying to capture the final slivers of information from the 46-year-old spacecraft.Undeterred, NASA engineers have been working to rescue the data. A "poke" sent to Voyager 1's internal systems on March 3 may have brought it back from the brink, NASA announced on<a target="_blank" href="https://blogs.nasa.gov/sunspot/2024/03/13/nasa-engineers-make-progress-toward-understanding-voyager-1-issue/"> Wednesday.</a>NASA engineers spotted an unusual dataset in the response to their prompt. This may hold the key to deciphering the spacecraft's cryptic signal, the agency said.<div type="image" title="A photo montage shows pictures taken by the Voyager probes next to an illustration of what the Voyager probes look like." height="1500" width="3000" msid="108527928" hostid="261"></div>The <a target="_blank" href="https://www.businessinsider.com/nasa-extends-voyager-2-probe-life-3-years-45-mission-2023-4">Voyager 1 and Voyager 2</a> probes have been feeding data about our universe since the late '70s when NASA first launched them.They remain marvels of engineering — no one expected them to <a target="_blank" href="https://www.businessinsider.com/nasa-voyager-pictures-45-year-journey-neptune-uranus-saturn-earth-2022-6#the-voyager-probes-were-designed-to-visit-jupiter-and-saturn-1">survive longer</a> than five years. But they have continued to send back information about the cosmos, exceeding their lifespan more than nine times over.Voyager 1 and Voyager 2 hold unique positions in space-exploration history as the only spacecraft to have ventured into interstellar space. Each spacecraft is more than 10 billion miles away from Earth and getting farther every day.While their instruments are feeling the weight of their age, NASA has managed to continue squeezing information out of the spacecraft with clever engineering tricks.This approach has provided an unprecedented glimpse into what happens beyond the sun's reach."That's what's most important is keeping these spacecraft operating as long as possible," Suzanne Dodd, NASA's project manager for Voyager, <a target="_blank" href="https://www.businessinsider.com/nasa-voyager-spacecraft-where-still-contact-communication-end-soon-2024-1">told Business Insider</a> in January.The glitch in Voyager 1 data is hardly unexpected. It is only the latest in a series of <a target="_blank" href="https://www.businessinsider.com/nasa-loses-contact-voyager-2-sent-wrong-command-mistake-space-2023-8">issues </a>in the probes' systems NASA has had to tackle. Experts have been concerned that repeat <a target="_blank" href="https://www.businessinsider.com/engineers-turn-to-voyager-decades-old-documents-fix-a-glitch-2022-7">malfunctions</a> are signs the probes are entering the last moments of their functional lives.But NASA appears to have found a solution. Engineers knew Voyager 1's issue seemed to lie with one of the three on-board computers that package the probe's data before sending it to Earth — the flight-data subsystem, or FDS.The ping to the FDS on March 1 returned a mostly muddled signal on March 3, but it contained some data that "differed from the rest of the computer's unreadable data stream."One NASA engineer with its Deep Space Network decoded this precious signal, unlocking a "readout" of the FDS's memory that contains instructions and variables the engineers can use to understand what went wrong.This doesn't mean all is saved."The team is analyzing the readout. Using that information to devise a potential solution and attempt to put it into action will take time," NASA said.Regardless of what happens, the probes' final missions will continue.Even when they can no longer communicate with Earth, Voyager 1 and Voyager 2 will continue to drift through the galaxy, carrying <a target="_blank" href="https://www.businessinsider.com/where-are-voyager-golden-records-elon-musk-2024-3">golden records</a> with information about humanity.The hope is that these could act as interstellar messages for potential intelligent life that may intercept the iconic spacecraft.

Voyager 1 briefly came back to life after a 'poke' from NASA, giving scientists hope for the 46-year-old probe

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Banks aggressively garnering funds via CDs, FDs amid firm credit off take

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Voyager 1 briefly came back to life after a 'poke' from NASA, giving scientists hope for the 46-year-old probe

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