Characteristics of the Company Fixed Deposits

• Corporate FD comes with a credit rating from reputable rating agencies like ICRA, CRISIL, and CARE. The rating will indicate a higher chance of default in the interest and principal payments and so helps the depositor in determining the financial institution's creditworthiness.
• Depositors could also ask for a premature withdrawal from the companies. Most of the HFCs and NBFCs charge a penalty rate on public deposits. However - particular public deposits have a three-month lock-in or fixed term where the deposits can't be withdrawn.
• The loans against corporate Fixed deposits are also open to depositors in both - cumulative and non-cumulative Fixed Deposits schemes. However - some financial institutions levy a premium over the entire fixed deposit interest rate.
• The interest income earned on corporate FDs is taxed based on the depositor's tax bracket.
• Depositors can also pick from the options of interest pay-out alternatives given by NBFCs or HFCs on their requirements. There are monthly, quarterly, half-yearly, and annual pay-out options that are open.
• Depositors could also choose the cumulative Fixed Deposit option where the interest component is reinvested, enhancing the power of compounding. As a result - the cumulative option would help the depositor in earning better returns than non-cumulative options.
• Corporate FDs are much riskier than bank FDs since they are not insured by the deposit insurance program offered by DICGC. In the case of Fixed Deposits opened with scheduled banks, a depositor's deposits of up to Rs. 5 lakh that is held with each scheduled bank areprotected from adverse events such as bank failures under the depositor insurance program.

Key Benefits of Corporate FDs

HIGHER RETURNS

Enjoy greater payoffs from Corporate FDs as compared to Bank FDs.

FLEXIBILITY

Choose Corporate FDs as per your preference from a variety of tenures such as, monthly, quarterly, half-yearly or yearly.

LIQUIDITY

Enjoy better liquidity with Corporate FDs with a lower lock-in period than Bank FDs

LOWER RISK

Avail the benefit of reduced risks with Corporate FDs which are backed by reputed rating agencies.

Factors to Choose the Best Corporate FD

• Credit Rating: Opt for higher-rated corporate FDs based on its credit rating which indicates the underlying risk of the company.
• Company Background: Assess a company’s business viability by referring to its Financial Statements, Management Discussion and Analysis (MD & A).
• Repayment History: Companies repayment history helps to determine company’s credit score, credibility and stability.

 
 YOU CAN ALSO APPROACH PROFESSIONAL EXEMPLAR FINANCIAL PLANNER WHO WOULD PROVIDE YOU UNBIASED ADVICE ACROSS ALL FINANCIAL AND NON-BANKING FINANCIAL COMPANIES WHILE BUYING ANY CORPORATE FIXED DEPOSIT.