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    Corporate/Company Fixed Deposits

    When most people think about fixed deposits, the first thing that comes to the mind is approaching a bank to open a fixed deposit. However, that is not the only place where you can open fixed deposits. Many finance houses also offer investors the facility to open fixed deposits that offer interest rates that can be higher than what most banks offer.


    These fixed deposits can be opened by individuals or groups or individuals like companies. In the case of individuals, resident Indians and NRIs can open company fixed deposits. To be able to open these fixed deposits you will need to provide an ID proof along with a request to open the FD. The ID proof can be a driver's licence, PAN cards, passports, etc.

    Features of the corporate fixed deposit

    Company or corporate fixed deposits offer customers a host of features that are meant to make their investments safer and profitable. Some of these features are:

    • These fixed deposits offer tenures that can range from 12 months to 60 months.
    • The minimum amount that can be deposited will vary from one company to the other. Some companies maintain a minimum of Rs. 2,000 while others may have minimum deposit amounts of Rs. 25,000 or more.
    • All the fixed deposits come with credit ratings from organisations like CRISIL that tell you how trustworthy the deposit is.
    • Once opened, additional deposits may be made into a fixed deposit as per the company’s rules.
    • Any of the company will not deduct taxes at source, which means you get the entire amount at the time of maturity.
    • Companies will also accept bulk deposits where the amount being remitted tends to be in excess of Rs. 5 crore.
    • Minors too can open these fixed deposits however, they may need a guardian to help them
    Company fixed deposit Interest rates

    The important things that you need to know about the fixed deposit interest rates offered by non-banking finance companies are:

    • The interest rates are determined by the duration of the term deposit.
    • Most companies offer cumulative and non-cumulative interest rates.
    • Some companies offer a slightly higher interest rate for senior citizens.
    • Some companies also offer higher interest rates for employees who open FDs with them.
    • Sometimes the facility of higher interest rates may even be extended to the family of an employee.
    Benefits of a company fixed deposit

    Some of the main benefits of opening corporate fixed deposits are:

    • They come with credit ratings indicating the quality of the deposit.
    • The interest earned through these deposits can be credited directly to an account or taken via a cheque. This option varies from company to company.
    • Some companies offer the option to credit the interest to the account on a monthly, quarterly, half-yearly or annual basis.
    • The interest from these fixed deposits can help augment your personal income or be used to plan for future expenses.
    How to decide on a good company FD

    When you are spoilt for choice it can become difficult to decide on which company you should open a fixed deposit with. To help you through the process all you need to do is follow these simple steps.

    Check interest rates offered

    For obvious reasons, this should be the first step you take because if you don’t then some day you might realise that a company you ignored offers you better interest rates than the current one.

    Check the minimum and maximum amounts

    Since most of the companies define what the minimum and maximum amount that can be put in an FD is, it is best to check it. In case you wish to start an FD with Rs. 25,000 but the company you choose allow a minimum of Rs. 50,000 then you will be in a soup.

    Check credit rating

    All fixed deposits offered by the various companies come with a credit rating issued by institutions like CRISIL. These ratings will help you determine if you should invest with them or not.

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