Corporate Fixed Deposit (FD) Schemes - FAQs and Benefits

Company Fixed Deposit (Corporate FD) is a term deposit that is held over a fixed period at a fixed rate 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.

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.

Selection Criteria of a Corporate FD

Consider these factors before choosing Corporate FD schemes to invest in.

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

Corporate FD related FAQs

What is the basic process of premature withdrawal?

The basic process of premature withdrawal of Corporate fixed deposits is as follows:

1. Submit the original FDR Certificate with all holders signatures;
2. Submit a Cancelled cheque;
3. Request letter from the client for premature withdrawal with the reason (All Holders Signature).

When can a client apply for premature withdrawal?

A client can apply for premature withdrawal subject to certain rules and conditions. Premature withdrawal will not be allowed before the completion of 3 months from the date of deposit. In case of a request for premature withdrawal after the expiry of 3 months, the following rates table shall apply.

• After 3 months but before 6 months: The maximum interest payable shall be 4% per annum for the individual depositor, and no interest in case of other categories of depositors.
• After 6 months but before maturity date: The interest payable shall be 1% lower than the interest rate applicable for the period for which the deposit has run.