Fixed deposit is financial instrument which earn a fixed interest over a period of time and the
rate of interest in these deposits are determined by the tenure of deposit and other allied factors.
Generally fixed deposit are issued by Financial Institution, Manufacturing Companies , Real Estate
companies and NBFC. In fixed deposits corporate fixed deposits provide higher rate of interest compared
to bank deposits. They are a good source of regular income by means of monthly, quarterly, half-yearly,
or yearly interest income. Corporate fixed deposits usually are unsecured in nature . Hence while investing
in these corporate deposit one should review financial performance of companies . The deposit made in a
company fixed deposit is governed by section 58A of the Companies Act 1956.
Salient Features of Corporate Fixed Deposits:
- High Interest rate
- Short term deposit
- Doorstep deposit and redemption facility
- No income tax deducted for interest up to 5000Rs.
- Higher Interest rates for senior citizens
- You can choose interest frequency; most issuers
offer monthly, quarterly, bi annual and annual cumulative deposits
- You get direct ECS credit facility for interest payments or advance
interest warrants for the year issued by most issuers.