A Beginner’s Guide to Corporate Fixed Deposits in India

Fixed deposits (FDs) are a popular choice among a large number of investors in India. You may invest a particular amount for a pre-determined period in these deposits. Moreover, the rate of interest is fixed, which ensures assured returns. These products are offered by banks and non-banking financial companies (NBFCs). Several corporations offer these deposits to enable you to earn higher returns. Read on to know more about corporate FDs.

What is a corporate FD?

FDs offered by NBFCs and other companies are known as corporate FDs. These deposits also provide a fixed rate of interest over flexible tenures as per your convenience. The interest earned on company FDs is taxable at your prevalent income tax slab. Compared to bank deposits, corporate FDs offer a higher interest rate.

Advantages of corporate FDs

  • Corporate fixed deposits are low-risk financial products with a pre-determined rate of interest that are not affected by market fluctuations.
  • Generally, you may choose from flexible tenures between one and five years as per your investment horizon.
  • Corporate FDs are versatile, and you can invest a minimum amount of INR 5000 with a maximum limit of INR one crore.
  • Issuers must procure a credit rating for their corporate fixed deposits in India, which reduces the risk when you invest in FDs with a high credit rating.
  • You may choose between a cumulative and non-cumulative deposit as per your convenience and financial situation; the former pays the entire principal plus the interest on maturity while the latter offers interest payouts at regular intervals.
  • Most company FDs offer a higher rate of interest to senior citizens.
  • Depending on the terms and conditions of the issuing company, you can prematurely withdraw the money to meet any emergency fund requirements.

Tips to choose the best corporate FD

  • To begin with, evaluate your financial situation and requirements to determine your investment objective.
  • Conduct extensive research on the available options to compare the company fixed deposit interest rates, investment tenures, premature withdrawal norms, and other terms and conditions.
  • Choose a company that meets your personal requirements and investment objectives.

If you are looking for the best corporate FDs, NBFCs like Mahindra Finance offer dual benefits of high interest rates and fixed returns. You may use an online FD calculator and visit their website today to know more about the potential earnings to make an informed investment decision.