Corporate Fixed Deposits (FDs)

As the name suggests, a fixed deposit is an investment option where investors earn assured returns over a period of time, typically ranging from a few months to a few years. In a fixed deposit investment, following are pre-decided and known to investor in advance (1) Period or tenure of investment (2) Interest rate for the period (3) Cumulative or Non-cumulative investment option (4)  Frequency of interest payments (5) Lock-in period.

Like banks offer an option of Fixed Deposits to investors, certain licensed Non-Banking Financial Companies (NBFCs) and Financial Companies are permitted to collect deposits from public. These corporate fixed deposits are governed by Section 58A of the Companies Act.

Individuals, Non Resident Indians, Partnership Firms, Hindu Undivided Family (HUF), Corporates, Trust can invest in Corporate Fixed Deposits. Similar to the bank deposits, corporate fixed deposits also offer a higher rate of return to senior citizens.