Earn interest up to 7.95% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

A corporate fixed deposit is an investment option provided by financial institutions, non-banking financial companies (NBFCs) and other corporate entities. It is essentially a term deposit that you can hold for a fixed period. On this deposit, you earn interest at the company FD rates fixed by the corporate entity. The tenor of investment in corporate fixed deposits can range from 1 year to 5 years. You can choose a period that aligns with your financial goals.

 

Investing in a corporate fixed deposit is an excellent investment strategy as it offers the advantage of guaranteed returns at rates that are slightly higher than bank FD rates. To make a smart investment choice, it is essential to choose the right organisation. In order to do this, you can compare the corporate FD rates , the investment tenors and other features and benefits for the FDs offered by different institutions. This will help you select the best corporate FD for your financial goals. 

Features of a Corporate FD

Corporate fixed deposits come with many beneficial features. Check out the key characteristics of these FDs below, so you can better understand how they can help you achieve your financial targets. 

 

  • Better Returns than Bank FDs

Corporate FD rates are generally higher than bank fixed deposit rates by a small margin. This makes them ideal investment options if you are looking for better returns at the cost of a nominal amount of extra risk.

 

  • Higher Corporate FD Rates for Senior Citizens

Like bank FD rates, company FD rates for senior citizens are also marginally higher than the rates offered to non-senior citizens. Typically, the rates are higher by around 0.25% per annum on deposits below a certain amount, like ₹1 crore.

 

  • Credit Ratings 

Company fixed deposits come with credit ratings offered by top credit rating agencies in India like CARE, ICRA and CRISIL. These ratings help you make a more informed decision about which corporate fixed deposit is relatively low-risk.

 

  • Option for Premature Withdrawals

Fixed deposit investments offered by companies also give you the option for premature withdrawals without any limits. That said, keep in mind that withdrawing your FD amount before maturity will reduce the overall returns you will earn from your investment. 

Why you Should Invest in a Corporate FD

There are many reasons to invest in a company fixed deposit. If you are on the fence about choosing this investment option for your portfolio, take a look at the primary reasons to invest in corporate fixed deposits, as outlined below.

 

  • Guaranteed Returns on Investment

Corporate fixed deposits offer guaranteed returns on the investment made in the plan. The returns are offered at the company FD rates, which are made known to you even before you invest. This helps you make an informed investment decision. 

 

  • Unaffected by Market Volatility

Company fixed deposits are not market-linked investments. As a result, they are not affected by market volatility or downturns. This can be particularly beneficial for conservative investors, who prefer low-risk investments, and also for risk takers who need some stability in their portfolio. 

 

  • Option to Avail Loans on the FD

You also get the option to avail a loan on your corporate fixed deposit in case of any financial emergency. This will help you keep your investments intact while still meeting your urgent cash requirements.

 

  • Suitable for Income Payouts or Capital Appreciation

Corporate fixed deposits offer different kinds of interest payout options like monthly, quarterly, semi-annual or annual interest payments. This can help you earn regular extra income. Alternatively, you can also choose to reinvest the interest and grow your corpus. 

Corporate FDs to Invest

If you are keen on experiencing the benefits offered by company fixed deposits, you may be interested in discovering your options in this segment of the financial market. Check out some of the top corporate FD plans you can invest in, along with the company FD rates for the same.

 

1. PNB Housing Finance 

PNB Housing Finance offers a fixed deposit that comes with a high safety assurance, as indicated by the FAA+/Negative rating by CRISIL and AA/Stable rating by CARE. If you want to invest in the fixed deposit plan offered by this housing finance company, check out the company FD rates you will earn based on the investment tenor. 

Plan

Interest Rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Cumulative fixed deposit (upto ₹5 Crore)

7.00%

6.80%

7.55%

7.40%

7.40%

Non-cumulative fixed deposit (upto ₹5 Crore)

7.00%

6.80%

7.55%

7.40%

7.40%

The corporate FD rates on PNB Housing Finance fixed deposits for senior citizens are higher by 0.25% per annum for investments up to ₹1 Crore. 

 

Disclaimer: These are the fixed deposit rates w.e.f 7th October, 2022 and they may be subject to change at the company’s discretion. 

 

2. Mahindra Finance

Mahindra Finance offers a wide range of corporate fixed deposits for you to choose from and invest in. All the FDs offered by this company bear the IND AAA or Stable rating by India Ratings. Here is a preview of the FD instruments and the respective corporate FD rates for different tenors.

Plan

Interest Rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Dhanvruddhi cumulative (upto ₹1 Crore)

6.90%

6.90%

7.40%

NA

NA

Dhanvruddhi non-cumulative (upto ₹1 Crore)

6.90%

6.90%

7.40%

NA

NA

Samruddhi cumulative (upto ₹1 Crore)

6.25%

6.60%

7.25%

7.25%

7.25%

Samruddhi non-cumulative (upto ₹1 Crore)

6.25%

6.60%

7.25%

7.25%

7.25%

The corporate FD rates for senior citizens are higher by 0.25% per annum on all the above deposits. 

 

Disclaimer: These are the fixed deposit rates w.e.f 5th September, 2022 and they may be subject to change at the company’s discretion. 

 

3. Bajaj Finance 

Bajaj Finance also offers corporate fixed deposits at attractive rates of interest. Having been rated AAA by CRISIL and ICRA, the fixed deposit avenues offered by this company are also safe to invest in. If you want the advantage of guaranteed returns with minimal risk, check out the corporate FD rates for the Bajaj Finance FD before you invest in it. 

Plan

Interest rates (per annum)

 

1-year FD

2-year FD

3-year FD

4-year FD

5-year FD

Cumulative fixed deposit (upto ₹5 Crore)

6.55%

7.25%

7.40%

7.40%

7.40%

Non-cumulative fixed deposit (upto ₹5 Crore)

6.55%

7.25%

7.40%

7.40%

7.40%

The corporate FD rates on Bajaj Finance fixed deposits for senior citizens are higher by 0.25% per annum. 

 

Disclaimer: These are the fixed deposit rates w.e.f 7th October, 2022 and they may be subject to change at the company’s discretion. 

Tax on Corporate FDs

The interest that you earn on your corporate fixed deposit is not exempt from tax. It is taxed under the category of ‘Income from Other Sources.’ Here are the key things you need to know about the taxation of your corporate fixed deposit interest.

 

  • The interest on company fixed deposits is added to your total income and taxed according to your income tax slab rate.

  • Companies may deduct tax on the interest income earned on your fixed deposits.

  • The rate of TDS depends on the amount of interest that you earn during the year.

  • If the interest is over ₹40,000, TDS will be deducted at the applicable rate for non-senior citizens.

  • For senior citizens, this limit is ₹50,000. 

  • The rate of tax deduction is 10% for Indian residents and 30% for Non-Resident Indians (NRIs).

How to Choose a Corporate FD? 

Before selecting a corporate FD, there are some important factors that you must consider. These factors are listed below.

 

  • The Reputation of the Organisation

It is critical to research the history of the firm with whom you choose to create a corporate FD. You should check to see if the company has a good track record of satisfied clients. It will also help you in determining the creditworthiness of the organisation. It is advisable to choose a company with an excellent market reputation in order to avoid a risky investment. 

 

  • History of Repayment

In terms of payments, an NBFC, financial institution or any other company must have a stellar track record. In order to broaden their consumer base, companies have begun to offer enticing FD interest rates. However, many companies may default on the payments. This is why you need to ensure that the company you choose has a good history of paying out the interest and the amounts due to their fixed deposit holders. 

 

  • Credit Ratings

Credit rating agencies like CRISIL, ICRA and CARE rate corporate fixed deposits based on the creditworthiness of the company. FDs with less stable ratings may offer a much higher interest, but the risk is also correspondingly higher. To get a better idea of the safety of the investment you are planning to make, you should check the credit ratings of the company FD you plan to invest in. 

 

Corporate fixed deposits can make for valuable additions to your portfolio if you plan your investment well. While the risk may be slightly higher than that of bank fixed deposits, company fixed deposits can also be quite safe if you choose highly rated corporate FDs. The element of guaranteed returns further adds to the safety aspect. 

FAQs about Corporate FD

  • ✔️What is a corporate FD?

    A corporate FD is a term deposit held with a company for a fixed period, and it earns returns at a fixed interest rate. This kind of FD program has various options for the investment tenor, allowing you to pick the time duration that best suits your financial goals. Investing in a corporate FD is a suitable investment alternative if you are looking for higher returns than regular FDs, but still do not want to take on high risks. 

  • ✔️What are the documents required to invest in a corporate fixed deposit?

    The exact list of documents required to open a company fixed deposit varies from one entity to another. However, broadly speaking, here is a list of the documents required:

    • Proof of identity, like your Aadhaar card, PAN or voter’s ID card

    • Proof of address, like your Aadhaar card, voter’s ID card or driving licence

    • Passport size photographs

  • ✔️Can I invest in a corporate FD online?

    Yes, you can easily invest in corporate fixed deposits online by visiting the website of the NBFC or financial company with which you wish to open the FD account and make your investment.

  • ✔️Who can invest in a corporate FD?

    Here’s a  list of people or organisations who can invest in company fixed deposits:

    • An resident individual or NRI above 18 years of age

    • Members of a HUF (Hindu Undivided Family)

    • Partnership firms

    • Family trusts

    • Corporations

    • Association of Persons (AOP)

    • Educational institutions

    • Societies 

    • Clubs

  • ✔️What are the minimum and maximum tenors of a corporate FD?

    The minimum tenor for investments in a corporate fixed deposit is typically 1 year, and the maximum tenor is generally 5 years. The tenors may vary slightly depending on the company offering the facility. 

  • ✔️Do I need to pay tax on my corporate FD?

    Yes, the interest you earn on your investments in company fixed deposits is categorised as ‘Income from Other Sources’ and is taxable accordingly.

  • ✔️What are the rates for TDS on a corporate fixed deposit?

    TDS deduction depends on the amount of interest received on the initial capital during the year. If the interest generated exceeds ₹40,000 (or ₹50,000 for senior citizens), TDS is deducted from the interest. TDS rates vary in accordance with your residential status. The rate is 10% for Indian residents and 30% for Non-Resident Indians (NRIs).

  • ✔️What is the difference between a corporate FD and a bank FD?

    A bank fixed deposit facility is offered exclusively by banks. On the other hand, corporate fixed deposits are offered by non-banking financial institutions and companies. Also, company FD rates tend to be slightly higher than bank FD rates. That said, company fixed deposits may also carry a bit more risk than bank fixed deposits. 

  • ✔️How to withdraw the amount in a corporate FD after maturity?

    You can withdraw your corporate FD at maturity either online or offline. If you wish to do this online, you can log into your account on the company’s website and place a request for the withdrawal. Alternatively, you can visit the nearest branch of the company, ask for the FD withdrawal form, fill it in and submit it along with the other documents required, if any. 

  • ✔️How interest is paid in a company FD?

    There are different payout options you can choose from in a company FD, such as monthly, quarterly, half-yearly or annual payouts. Alternatively, you can also choose to reinvest the interest in the company fixed deposit and get paid at maturity. 

  • ✔️What things to keep in mind while choosing a corporate FD?

    Before you invest in a corporate fixed deposit, factor in the following parametres: 

    • The credit rating of the company as provided by CRISIL, CARE or ICRA 

    • The company FD rates at which interest is offered on the investment 

    • The financial stability of the company offering the FD facility 

  • ✔️Are corporate FDs and company FDs the same?

    Yes, corporate fixed deposits are also called company fixed deposits. 

  • ✔️How to withdraw a corporate FD before maturity?

    You can withdraw the funds from your corporate fixed deposit before the maturity date too. However, this may attract a nominal penalty, based on the terms and conditions of the company offering the FD facility. Here is how you can liquidate your corporate fixed deposits prematurely.

     

    • Visit the nearest branch of the company or head to the company’s website

    • Fill out the form required to make your premature withdrawal

    • Submit the form along with the documents required, which may include the original FD receipt, a cancelled cheque and a request letter stating the reason for withdrawal.