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Corporate/Company Fixed Deposits

Corporate FDs, as suggested by the name, are offered by companies and financial institutions. They function similar to regular bank fixed deposits, other than a few exceptions. These fixed deposits offer a comparatively higher interest rate than bank fixed deposits. The corporate fixed deposit applications are available via the official website of your chosen company or financial institution or from the company itself. Such deposits run the risk of not offering the expected payout after the completion of the tenure in specific situations. Some common factors can be when the company has run into bankruptcy, has been hit by recession, etc. Tenure of corporate fixed deposits vary between companies and financial institutions, and generally ranges between 1 year and 7 years. The tenure options differ between companies and financial institutions offering them.

Features of Corporate Fixed Deposits

Following are some salient featured of Corporate Fixed Deposits-

  • The accumulated corpus can be utilized for immediate or long-term goals like purchasing a car or home, or financing a vacation.
  • These deposits work in the same way as regular fixed deposits, but feature higher interest rates.
  • The capital growth on the invested amount is determined by the pre-decided interest rate. The investment is not exposed to the unpredictability of market risks. Hence, they are low risk investments and well suited for investors with low risk appetite.
  • The flexible tenures ensure that investors can choose it as per their investment goals, the amount that they would like to invest during each frequency, etc.
  • Some corporate FDs offer the flexibility of premature withdrawals without restrictions.
  • They are rated by credit rating agencies like CRISIL and ICRA, which is a measurement of their credibility and effectiveness as an investment instrument. Investors can invest in one as per their ratings.

Benefits of Opting for Corporate Fixed Deposits

Here are a few benefits of opting for Corporate FDs:

  • The capital growth of a corporate FD, like all Fixed Deposit schemes, is determined by the pre-decided interest rate.
  • Interest rates offered against corporate FDs are higher than other FDs, thus, generating greater returns.
  • It offers the convenience of high liquidity. Generally, 75% of the amount invested in corporate FDs can be liquidized for the purpose of loan at the rate of 2% above the rate interest on the deposit. What’s more, it also offers a pre-mature withdrawal option.
  • It offers the scope of compounding interest on the invested amount by reinvesting the principal and the earned interest.
  • Corporate Fixed Deposit schemes offer flexible tenure that investors can select from, as per their varied objectives. The tenure usually varies between 1 year and 7 years.
  • Corporate FDs also include a range of interest frequencies - monthly, quarterly, bi-annual and annual cumulative deposits, which investors can opt for as per their financial goals.
  • Payments can be made online or offline, according to the preference of investors. The payments can be made through direct ECS credit facility for interest payments or advance interest warrants for the financial year.

Corporate Fixed Deposits with Online Payment

Company NameMinimum Investment Rs.1 Year2 Years3 Years
Mahindra and Mahindra Financial ServicesRs. 10,0008.10%8.50%8.80%
National Housing BankRs. 50,0007.25%7.25%7.50%
Shriram City Union Finance LimitedRs. 10,0008.25%8.50%9.00%
SHRIRAM TRANSPORT FINANCE CO. LTD.Rs. 10,0008.25%8.50%9.00%

Interest rates are subject to revision by the above said companies, without any prior notice.

Mahindra and Mahindra Financial Services

  • The duration of Corporate FDs vary between 12 months and 60 months
  • Interest rate ranges from 7.9% to 8.8% p.a.
  • Interest is payable on the deposit from the date of realization of cheque/demand draft or RTGS transfer
  • Interest on deposits classified under Monthly Income Plan, Non-Cumulative Option and Annual Income Plan is paid on fixed dates as in the illustration below:

    • Monthly Income Plan (MIP): Last day of each month
    • Non - Cumulative: Quarterly June 30, September 30, December 31 and March 31
    • Non - Cumulative: Half Yearly September 30 and March 31
    • Annual Income Plan (AIP): March 31
  • Cumulative Interest Option / Easy Way: Interest is compounded annually on 31st March of every financial year after applicable tax deduction. The principal along with interest is payable on maturity.

  • Rate of Interest is revised at the beginning of every interest period. ROI on the first day of the interest period remains applicable for the entire interest period

National Housing Bank

  • The duration of Corporate FDs for this company ranges between 24 months and 60 months
  • The interest rate varies between 7.25% to 7.50% p.a.

Shriram City Union Finance Limited

HALF YEARLY NON CUMULATIVE DEPOSIT

PeriodRate of interest for Individual (p.a.)Rate of interest for Senior Citizen (p.a)Minimum fixed deposit amountInterest Payout
12 Months8.08%8.33%Rs. 10,000Half Yearly
24 Months8.33%8.57%Rs. 10,000Half Yearly
36 Months8.81%9.05%Rs. 10,000Half Yearly
48 Months8.81%9.05%Rs. 10,000Half Yearly
60 Months9.05%9.28%Rs. 10,000Half Yearly

QUARTERLY NON CUMULATIVE DEPOSIT

PeriodRate of interest for Individual (p.a.)Rate of interest for Senior Citizen (p.a)Minimum fixed deposit amountInterest Payout
12 Months8.00%8.25%Rs. 10,000Quarterly
24 Months8.25%8.48%Rs. 10,000Quarterly
36 Months8.71%8.95%Rs. 10,000Quarterly
48 Months8.71%8.95%Rs. 10,000Quarterly
60 Months8.95%9.18%Rs. 10,000Quarterly

YEARLY NON CUMULATIVE DEPOSIT

PeriodRate of interest for Individual (p.a.)Rate of interest for Senior Citizen (p.a)Minimum fixed deposit amountInterest Payout
12 Months8.25%8.50%Rs. 10,000Annually
24 Months8.50%8.75%Rs. 10,000Annually
36 Months9.00%9.25%Rs. 10,000Annually
48 Months9.00%9.25%Rs. 10,000Annually
60 Months9.25%9.50%Rs. 10,000Annually

MONTHLY NON CUMULATIVE DEPOSIT

PeriodRate of interest for Individual (p.a.)Rate of interest for Senior Citizen (p.a)Minimum fixed deposit amountInterest Payout
12 Months7.95%8.19%Rs. 20,000 Contnent R1C5
24 Months8.19%8.42%Rs. 20,000Monthly
36 Months8.65%8.88%Rs. 20,000Monthly
48 Months8.65%8.88%Rs. 20,000Monthly
60 Months8.88%9.11%Rs. 20,000Monthly

CUMULATIVE DEPOSIT -- Interest Compounded Monthly

PeriodRate of interest for Individual (p.a.)Rate of interest for Senior Citizen (p.a)Minimum fixed deposit amountInterest Payout
12 Months7.95%8.19%Rs. 10,000On maturity date
24 Months8.19%8.42%Rs. 10,000On maturity date
36 Months8.65%8.88%Rs. 10,000On maturity date
48 Months8.65%8.88%Rs. 10,000On maturity date
60 Months8.88%9.11%Rs. 10,000On maturity date

Corporate Fixed Deposits with Offline Payment

Company NameMinimum Investment Rs.1 Year 2 Years 3 Years
HDFC LIMITED Rs. 20,0007.87%7.87%7.87%
HUDCO LimitedRs. 10,0007.30%7.30%7.30%
PNB HOUSING FINANCE LTD Rs. 20,0008.30%8.30%8.40%

Interest rates are subject to revision by the above said companies, without any prior notice.

HDFC LIMITED

  • Corporate Fixed Deposits for this company range from 12 months to 66 months
  • Interest rate ranges from 7.6% to 8.08% p.a.

HUDCO Limited

  • Corporate FDs for this company are offered for a duration between 12 months and 60 months
  • The interest rate ranges from 7.05% to 7.5% p.a.

PNB HOUSING FINANCE LTD

FD interest rates (w.e.f. from 8th October, 2018) on Regular Deposit of up to Rs. 5 crore

PeriodMonthly (p.a.)Quarterly (p.a.)Half Yearly (p.a.)YearlyInterest (p.a.)Effective Yield# (p.a.)
238.00%8.05%8.10%8.30%8.30%8.30%
24 - 358.00%8.05%8.10%8.30%8.30%8.64%
36-478.10%8.15%8.20%8.40%8.40%9.13%
48-598.10%8.15%8.20%8.40%8.40%9.52%
60-718.15%8.20%8.25%8.45%8.45%10.00%
72-848.00%8.05%8.10%8.30%8.30%10.23%
1207.95%8.00%8.05%8.25%8.25%12.09%
Min. amt.1,00,00050,00020,00020,00020,000-