• Corporate/Company Fixed Deposits

    A company FD or company term deposit is nothing but a type of FD that is issued by companies such as finance companies, housing finance firms or other types of NBFCs. Company fixed deposits are a great way to raise funds from the general public for many firms/companies. These term deposits are usually rated for their credibility by a number of rating agencies such as ICRA, CARE, CRISIL, etc.

    Best Corporate/Company FD Schemes 2022

    Company FD Schemes Interest Rates 2022: (1-year tenure)

    Company Regular FD Rates Senior Citizen FD Rates
    Kerala Transport Development Finance Corporation Limited 5.75% - 6.00% 6.00% - 6.25%
    Mahindra Finance 5.50% - 6.45% 5.75% - 6.70%
    LIC Housing Finance 5.10% - 5.60% 5.35% - 5.85%
    Shriram City Finance 6.50% - 7.75% 6.80% - 8.05%

    Benefits of Corporate/Company Fixed Deposit

    • Higher interest rates: The best thing about a company FD is the interest rate. The rates paid are comparatively much higher than what is paid for an average bank FD.
    • Periodic interest payment options: There are a number of interest payout options to choose from such as monthly, quarterly, half-yearly, and yearly.
    • Credit ratings: Almost all company FDs are rated by autonomous agencies such as ICRA, CRISIL and CARE. This offers customers a chance to go for a well rated FD.
    • Easy loans: Most of the company FDs give easy loan up to 75% of the maturity amount. The penalty for premature withdrawal is minimal which is another option for easy liquidity.

    Eligibility Criteria for Company FD

    Who can appl
    • Individuals
    • NRIs
    • Senior citizens
    Documents required
    • PAN card
    • Aadhaar card
    • Passport
    Ag
    • Those who are above 18 years
    • Minors can open an account along with a guardian

    Top Company Fixed Deposit Features and Interest Rates

    Mahindra Finance Fixed Deposit Scheme

    • This scheme offers a comparatively higher rate of interest.
    • It is rated FAA by CRISIL, which indicates high safety of interest payment.
    • Extra interest benefit of 0.25% per annum for senior citizens for deposits up to Rs. 1 crore.
    • Non-cumulative interest is paid through NACH/NEFT yearly, half-yearly or quarterly.
    • Cumulative interest is compounded and then tax deductions are made.
    Minimum Amount Period (Months) Amount Payable (Rs.) Interest (p.a.) Effective yield (p.a.)
    Rs.5,000/- 12 5275 5.50% 5.50%
    24 5618 6.00% 6.18%
    36 6006 6.30% 6.71%
    48 6420 6.45% 7.10%
    60 6834 6.45% 7.34%

    Kerala Transport Development Finance Corporation Fixed Deposit Scheme

    • The Kerala Government guarantees for this FD scheme which significantly reduces the risk while investing.
    • The senior citizens get additional interest benefit of 0.25% with this scheme.
    • The depositor gets renewal option with this scheme.
    • The minimum deposit amount is Rs.10,000.
    Tenure Regular Individuals Interest Rates (p.a.) Senior Citizens Interest Rates (% p.a.)
    1 year 6% 6.25%
    2 years 6% 6.25%
    3 years 6% 6.25%
    4 years 5.75% 6%
    5 years 5.75% 6%

    LIC Housing Finance Fixed Deposit Scheme

    • The minimum deposit amount for this scheme is Rs. 20,000 for yearly option.
    • The interest will be compounded annually for cumulative deposits.
    • The depositor can make additional deposits in multiples of Rs. 1,000 for yearly option.
    Period Rate of interest (p.a.) monthly (Non-Cumulative) Rate of interest (p.a.) yearly (Cumulative & Non-Cumulative)
    1 year 5.10% 5.25%
    18 months 5.35% 5.50%
    2 years 5.50% 5.65%
    3 years 5.60% 5.75%
    5 years 5.60% 5.75%

    Shriram City Finance Fixed Deposit

    • This scheme gives easy withdrawal options with flexible tenure.
    • The minimum deposit amount is Rs.5,000.
    • The scheme can be availed in both cumulative and non-cumulative formats.
    Tenure (months) Interest Rates for Regular Individuals (p.a.) Interest Rates for Senior Citizens (p.a.)
    > = 12 to < 24 5.25% 5.50%
    > = 24 to < 36 5.85% 6.1%
    > = 36 to < 48 6.05% 6.3%
    >= 48 to < 60 6.3% 6.55%
    > = 60 to < 72 6.45% 6.7%
    >=72 to 6.10% 6.35%

    Note: Interest rates w.e.f. 10 October 2021.

    How to Choose a Corporate/Company FD

    • 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.
    • Check interest rates offered: It is important that you check and compare interest rates before opting for one. Certain NBFCs offer higher interest rates when compared to other for the same tenure.
    • 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.

    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.

    Credit card Against Corporate/Company FD:

    Credit cards do make life easier, but it requires a lot of documentation as compared to an FD. In case you have an FD, you can opt for a credit card against an FD, i.e. a secured credit card. You will continue earning interest on your FD even if you pledge the FD as ecurity for a credit card.

    The credit limit for a credit card is low, so you can use it to build a credit score by clearing outstanding balance on time.

    FAQs on Company Fixed Deposit

    1. What is the difference between a bank FD and a company FD?

      In terms of differences, both are FD accounts and offer the same features. Bank FDs are generally regarded more safer and pay lesser interest rate.

    2. Are corporate FDs and company FDs the same?

      Yes.

    3. Is there an option for premature withdrawal?

      Yes. The deposit can be broken before the maturity period but some NBFCs mandate a longer minimum investment period that may go upto 6 months to a year.

    4. How to apply for a company FD?

      You can apply for a company FD online or by contacting the firm where you want make an investment.

    5. Are FD receipts issued?

      Receipts may be issued to those who have applied for an FD offline/by visiting the branch.

    6. Are senior citizens eligible to get a higher interest rate?

      Yes, in most cases.

    7. Is TDS applicable even for such FDs?

      Yes.

    8. How is interest paid to the deposit holder?

      Interest payments will be credited to the bank account of the customer electronically as per the chosen frequency of interest payment.

    9. Can you apply for a company FD online?

      In most cases, yes.

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