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Fixed Deposits

What is a Corporate Fixed Deposit (Corporate FD)?

A Corporate FD is a fixed deposit offered by companies (NBFCs or corporates) instead of banks. It works like a bank FD but often offers higher interest rates.

✅ Key Features of Corporate Fixed Deposits

Feature

Details

Higher Interest

Typically 0.5% to 2% higher than bank FDs

 Tenure

Flexible – usually from 1 to 5 years

Interest Payout

Monthly, Quarterly, Half-Yearly, Annually or Cumulative

Minimum Investment

₹10,000 – varies by company

Safety Ratings

Rated by CRISIL, ICRA, CARE, etc. (Example: AAA for safety)

Deposit Type

Individual, Joint, NRI (subject to conditions)

🔹 Corporate Fixed Deposit Q&A

A: It is a fixed deposit scheme offered by companies (non-banking financial companies or corporations) where you invest a lump sum for a fixed tenure at a fixed interest rate.
A: Corporate FDs usually offer higher interest rates than bank FDs but come with a higher risk since they are not backed by government insurance (like the Deposit Insurance and Credit Guarantee Corporation for bank FDs).
A: The tenure ranges from 6 months to 5 years, depending on the company and the scheme.
A: Interest rates are generally higher than bank FDs, typically ranging from 7% to 12% annually, depending on market conditions and the company’s credibility.
A: Yes, interest income from corporate FDs is taxable as per your income tax slab. Tax is deducted at source (TDS) if interest exceeds the prescribed limit.
A: Some companies allow premature withdrawal with a penalty, but it depends on the company’s terms and conditions.
A: Corporate FDs carry a higher risk than bank FDs. It’s important to invest in financially strong, well-rated companies and check credit ratings before investing.
A: Credit rating agencies assign ratings (like AAA, AA, A) to companies based on their financial health. Higher ratings indicate lower risk.
A: Yes, NRIs can invest in corporate FDs subject to FEMA regulations and company policies.
A: You can apply through company branches, brokers, or authorized agents with required documents like identity proof and PAN card.