Corporate Fixed Deposit
Corporate Fixed Deposit
Company Fixed Deposit (corporate FD) is a term deposit which is held over fixed period at fixed rates of interest. Company Fixed Deposits are offered by Financial and Non-Banking financial companies (NBFCs). The maturities of various company fixed deposits can range from a few months to a few years.
What is the difference between FD and corporate FD?
The most important difference between the Corporate FD and Bank FD is that corporate FDs offer high rates of interest whereas Bank FDs offer low rates of interest to their customers. The penalty period for early withdrawal is lower as compared to Bank FDs.
Benefits and features of company fixed deposits
- Company FDs are fixed deposits that are offered by companies and financial institutions.
- These deposits function as regular fixed deposits, but feature higher interest rates.
- They are low-risk investments and do not face the influence of market forces.
- They may be flexible in some cases. This means that you get to choose your tenor or maturity terms.
- Company FDs can be liquidated easily depending on the terms of the institution.
- These accounts may offer premature withdrawals without restrictions.
- The money from company FDs can be used for any purpose like financing a holiday or even purchasing an asset.
- They offer non-cumulative and cumulative interest pay-outs.
- They feature safety ratings by credit agencies like ICRA and CRISIL. You can choose one based on how high the ratings are.
