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What are shares?

Shares are a way to own a part of the company’s value. In proportion to the capital you invest, you can get ownership rights to a certain percentage of the company. Say you own 2% of the shares being traded in the market, you can say you have 2% ownership in the company. Hence, shares are units of ownership in the company and its financial assets. Shares are also known as stocks, equity, scrips etc. After purchasing them you will be known as a stockholder or a shareholder of the company.

What are Nifty and Sensex?

All companies who want to get listed approach either NSE, BSE or both. All stock exchanges need equity benchmarks to signify the trend in the stock market in the best way possible. Both BSE and NSE have 100s and 1000s of companies listed on them.

But if you have to pick the top 30 stocks, or look at what the bottom 100 are doing, it will be difficult for you to siphon through this huge number of companies listed. What indices like Nifty and Sensex do is to group them together.

Nifty 50 is a collection of the top 50 companies listed on NSE and Sensex is a collection of the top 30 stocks listed on BSE by way of market capitalisation. The top companies are the ones that influence the stock market the most and influence the country’s economy the most. Hence an index with the top and largest companies is the best gauge for how the entire stock market.

There is also BSE500, Nifty Midcap, BSE Smallcap and many more such indices. However, Nifty 50 and Sensex are primary benchmarks.

How do you make money?

There are two ways

1. Stock investors: Stock investors are those who keep their money in the stock for a longer period of time, sometimes even years. Returns are compounded over a period of time. Investors use fundamental analysis. They look at the growth trajectory of the company because your investment literally grows with the company in the long term.

2. Stock traders: Stock traders generally buy and sell within the same trading session. Traders use technical analysis to understand which stocks to invest in. Traders look for short and quick gains. Stock trading basics will require you to learn technical indicators like momentum oscillators, Bollinger bands, charts and more.

  • It is safe to invest in corporate fixed deposits as they are less risky and are not influenced by market changes.

  • A company fixed deposit is the term deposit where the money is held for a tenure against interest-based returns.

  • Corporates are ranked or rated in terms of AAA, AA, BB, and these ratings are made based on the companies' previous financial records. Using these ratings, one can determine the best company for fixed deposits. AAA is the highest rating for a corporate.

  • If you want to invest in the company's fixed deposits, one way to buy is from the brokers. These are verified and take certain commissions while they help in buying the company's fixed deposit.

  • The tenure period of corporate fixed deposits ranges from months to years but cannot cross more than five years.

Corporate FDs hold a great chance for those who wish for higher returns, and besides, it also diversifies the investment. They offer higher interest rates than bank FDs. They can be compared on an operational and rating basis, making it easier to choose a potential company for corporate FD.