Corporate Deposits / Bonds

Overview

Corporate fixed deposit is a deposit in company for a fixed rate of return over a fixed period of time. The rate of interest is determined by the tenure of the deposit as well as other factors. NBFC’s, Housing Finance & Manufacturing companies accept such deposits. The corporate fixed deposit is governed by section 58A of the Companies Act. Company fixed deposit is a good option for investment as they provide higher rate of interest compared to bank deposits. They are a good source of regular income by means of monthly, quarterly, half-yearly, or yearly interest incomes.

Before investing the investor should consider the Credit rating and performance of the corporates. Performance of the company can be reviewed from time to time and at the maturity of deposit, by analysing Balance Sheet & Share Prices movement. This will be helpful in deciding whether the deposit should be renewed or not.


Key Benefits of Corporate Fixed Deposit

  • Higher rates of Interest, generally higher rate as compared to bank deposit.
  • Flexible tenure ranging from 1 year to 10 years
  • Senior citizen benefits available.
  • Prematurity clause is available. The minimum lock-in period for most of the schemes is six months, i.e. investors can withdraw their money post six months, anytime.
  • Loan facility available.
  • Nomination facility available.
  • No TDS up to the interest of Rs. 5000/- in a financial year.
  • Regular interest income – Monthly, Quarterly, Half yearly or Yearly.

BONDS

Bonds issued by government of India and or by Corporates.

  • Floating rate bonds issued by Central Government
  • Corporate Bonds
  • Tax free Bonds
  • PSU Debentures
  • CAPITAL GAIN BONDS U/s 54EC

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