CORPORATE FIXED DEPOSITS
The deposit placed by investors with companies for a fixed term carrying a prescribed rate of interest is called Company Fixed Deposit. Financial institutions and Non-Banking Finance Companies (NBFCs) also accept such deposits. Deposits thus mobilised are governed by the Companies Act under Section 58A.
Apart from Scheduled Commercial Banks, many leading Bluechip companies’ raise Fixed deposits from the public which are normally AAA rated indicating utmost safety. Indica Investments helps its clients in putting some amount of resources into such AAA rated Company deposits there by helping them with higher returns vis a viz Banks Fixed Deposits. It scans their balance sheets, past history and future prospects before recommending to its valuable clients.
Features of Company FDs
1. The interest rates offered on Company FDs are generally higher than those offered on bank fixed deposits
2. The interest income is provided on a fixed periodic basis such as monthly, quarterly, half yearly or annually.
3. The company fixed deposits have different maturity periods ranging from six months to seven years.
4. Corporate FDs provide the investors an opportunity to choose a nominee for the deposit.
5. Company FDs are riskier as compared to bank FDs as the returns on the former are only assumed. Unlike bank fixed deposits, the interests paid on corporate fixed deposits are not fixed and can vary depending upon the financial conditions of the company. For example, if a corporate FD carries an interest rate of 9 percent, the actual rates received can also be 5 percent.
Corporate Fixed Deposits
are best suited for investors who want to earn fixed returns on their investments. Our rich menu of AAA and AA rated fixed deposits of varying tenures provide stability to your portfolio amid volatile markets.
How to choose a Corporate FD?
• Credit Rating:
It indicates the underlying risk of the company. Hence it is better to opt for highly rated FDs
• Company Background:
It can be assessed through its financials and the viability of its business
• Repayment History:
Companies with a better repayment history are a safer bet for investors