These types of deposits are offered by corporate companies. Generally, banks are the issuers of fixed deposits services or products in India.But there are other non banking institutions that offer similar deposit products to investors. These corporate entities could be involved in various businesses & may require capital to fund their operations. In such scenario, they issue deposit certificates to the investors of different tenures at fixed interest rates. These types of deposits offer high interest rates than the ones offered by banking institutions. Hence, investors prefer to include corporate deposits in their investment portfolio.A well chosen corporate deposit scheme will yield great returns for an investor. Though these type of deposits offer higher interest rates, there is also a slightly higher risk associated with them.
Types of Companies offering Fixed Deposits
- Financial Institutions
- Non-Banking Finance Companies (NBFCs).
- Manufacturing Companies
- Housing Finance Companies
- Government Companies
Features and Benefits
Company Fixed Deposits offer comparatively higher returns than banks.
- Choose the best tenure for you from a wide range as per your convenience. You can choose how frequently you want to receive your interest payments:
- Company Fixed Deposits are non transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused.
- Premature encashment of deposit is available any time subject to payment of prescribed penalty.
- Diversify Risk- The deposits should be spread over a large number of companies engaged in different industries. This way, you’ll be able to diversify your risk among various industries/companies.
- Wide Choices- Many companies operating in the Company Deposit market. This will help you decide whether to renew or reshuffle the deposit.
- Attractive rates as applicable from time to time.