CORPORATE FIXED DEPOSITS
As an investor, we always expect the steady returns and investment safety. Corporate fixed deposit is an investment avenue that delivers fixed return, decent security at the minimum risk.
Corporate or company fixed deposit is the same as Bank FDs. Fixed deposit with a bank is usually the first step when saver decides to consciously start investing his surplus. Corporate Fixed Deposit is designed almost on a similar basis. It aims to have a higher yield as compared to bank FD.
CFD is issued by finance companies, housing financing firms, and other Non-banking finance companies (NBFCs). They issue the CFD with different interest rates and for different tenure/periods.It is an excellent choice of investment for the senior citizens who expect better returns than the bank fixed deposits. An investor can invest in the CFD with the companies for the fixed tenure at the fixed interest rate. In simple words-
A corporate fixed deposit means the company borrowing unsecured loans from the investor.
Types of Corporate Fixed Deposits:
Under CFD there are two types of fixed deposits scheme available:
- Cumulative CFD- In this type of FD, interest is stock-piled with the principal investment and then the complete amount is paid to the investor at the end of the tenure. No interest is paid to the investor during the investment period.
- Non-cumulative CFD- Here, the interest is paid to the investor in regular intervals- monthly, quarterly, half-yearly, or annually, depending on the investor’s choice.
Why should you invest in CFD?
Following are the key features of the corporate fixed deposit, helping you to understand the product with a better perspective :
- Corporate fixed deposits offer fixed tenure and fixed rate of returns.
- How long to stay invested in CFD is the investor’s decision. They can choose to stay invested in the corporate fixed deposit either for a few months or years.
- Early exit (premature withdrawal) from the CFD is allowed*.
- CFD offering companies are rated by CRISIL and ICRA rating agencies.
- Corporate fixed deposits are administered by the Companies Act 1956 u/s 58-A.
Who should invest in CFD?
- Investors who desire stable returns with no or less risk.
- Senior citizens can earn the benefit of regular income by investing in corporate FDs with additional / special rate.
Difference between company FDs and Bank FDs:
|Company Fixed Deposit||Bank Fixed Deposit|
|It is issued by||Finance companies & NBFCs||Banks|
|It is regulated under||Companies Act 1956||Banking Regulation Act, 1949.|
|Insured investment up to||₹10,000||₹1,00,000|
|Offered interest on||Higher than bank FDs||Lower than CFDs|
|Minimum tenure to invest||6 months (Half-yearly)||7 days (week)|
Some of the Companies currently accepting Fixed Deposits
|COMPANY||INTEREST RATE||Period||Print Form / Rate Card||Give Rating in a column||Sr. citizen||Renewal Benefit|
SHRIRAM UNNATI FIXED DEPOSIT
|8.15%||36 Months||Download FormView Rates||FAA||0.25%||0.25%|
BAJAJ FINANCE LTD.Apply Online
|7.00%||36 Months||Download FormView Rates||FAA||0.25%||0.10%|
MAHINDRA & MAHINDRA FINANCE LTD.
|6.30%||36 Months||Download FormView Rates||FAA||0.25%||-|
HDFC SPECIAL DEPOSITS UPTO 2 CROREApply Online
|5.95%||33 Months||Download FormView Rates||MAAA by ICRA and AAA/Stable by CRISIL||0.25%||0.10%|
HDFC LTD PREMIUM DEPOSIT PLAN (Upto 2 Cr)Apply Online
|5.85%||30 Months||Download FormView Rates||MAAA by ICRA and AAA/Stable by CRISIL||0.25%||0.10%|
HDFC Deposits Individual - RegularApply Online
|5.95%||36 Months||Download FormView Rates||MAAA by ICRA and AAA/Stable by CRISIL||0.25%||0.10%|
PNB Deposits Individual- Regular
|6.60%||36 Months||Download FormView Rates||AAA||0.25%||-|
LIC HOUSING LTD
|5.75%||36 Months||Download FormView Rates||FAA||0.25%||-|
ICICI Home Finance Fixed Deposits
|5.95%||36 Months||Download FormView Rates||MAAA||0.25%||-|
FIXED DEPOSITS FD CALCULATOR
|Sr.No.||Company Name||Deposit Number||Deposit Date||Deposit Period||Maturity Date||Interest Rate(p.a)||Deposit Amount||Maturity Amount||Payable|