Corporate Fixed Deposit

A company or corporate fixed deposit can help you earn higher returns with flexible tenure. Know more about it in this article.
Corporate Fixed Deposit
4 mins
16 July 2024

Company fixed deposit (corporate FD) or NBFC fixed deposit are term deposit kept for a set amount of time at a set interest rate. Financial institutions, both banking and Non-Banking Financial Companies (NBFCs), provide corporate fixed deposits. Many Company fixed deposits have maturities that can range from a few months to a few years.

To meet your investment needs, choose from a variety of company fixed deposit choices with varied tenures, interest rates, and institutions. You can get profitable returns and gain from significantly reduced volatility with high rated company fixed deposit.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.65% p.a. by investing for 42 months via website and app.

Company fixed deposit interest rates

Bajaj Finance FD interest rates for non-senior citizens:

Tenure in months

Cumulative (interest + principal amount payment at maturity)

Non-cumulative (interest payout at a defined frequency, principal paid at maturity)

At maturity

(p.a.)

Monthly

(p.a.)

Quarterly

(p.a.)

Half yearly

(p.a.)

Annual

( p.a.)

12 - 14

7.40%

7.16%

7.20%

7.27%

7.40%

15-17

7.50%

7.25%

7.30%

7.36%

7.50%

18*

7.80%

7.53%

7.58%

7.65%

7.80%

19-21

7.50%

7.25%

7.30%

7.36%

7.50%

22*

7.90%

7.63%

7.68%

7.75%

7.90%

23

7.50%

7.25%

7.30%

7.36%

7.50%

24-32

7.80%

7.53%

7.58%

7.65%

7.80%

33*

8.10%

7.81%

7.87%

7.94%

8.10%

34 - 35

7.80%

7.53%

7.58%

7.65%

7.80%

36-41

8.10%

7.81%

7.87%

7.94%

8.10%

42*

8.40%

8.09%

8.15%

8.23%

8.40%

43

8.10%

7.81%

7.87%

7.94%

8.10%

44*

8.25%

7.95%

8.01%

8.09%

8.25%

45 - 60

8.10%

7.81%

7.87%

7.94%

8.10%


Bajaj Finance FD interest rates for senior citizens:

Tenure in months

Cumulative (interest + principal amount payment at maturity)

Non-cumulative (interest payout at a defined frequency, principal paid at maturity)

At maturity

(p.a.)

Monthly

(p.a.)

Quarterly

(p.a.)

Half yearly

(p.a.)

Annual

( p.a.)

12 - 14

7.65%

7.39%

7.44%

7.51%

7.65%

15-17

7.75%

7.49%

7.53%

7.61%

7.75%

18*

8.05%

7.77%

7.82%

7.89%

8.05%

19-21

7.75%

7.49%

7.53%

7.61%

7.75%

22*

8.15%

7.86%

7.91%

7.99%

8.15%

23

7.75%

7.49%

7.53%

7.61%

7.75%

24-32

8.20%

7.91%

7.96%

8.04%

8.20%

33*

8.35%

8.05%

8.10%

8.18%

8.35%

34 - 35

8.20%

7.91%

7.96%

8.04%

8.20%

36-41

8.35%

8.05%

8.10%

8.18%

8.35%

42*

8.65%

8.33%

8.38%

8.47%

8.65%

43

8.35%

8.05%

8.10%

8.18%

8.35%

44*

8.50%

8.19%

8.24%

8.33%

8.50%

45 - 60

8.35%

8.05%

8.10%

8.18%

8.35%


Note: The above FD rates are 16 July, 2024.

You can calculate the returns on your investment with the help of FD interest rates calculator.

Company Fixed Deposit: Why You Should Invest

A company term deposit, often known as a company FD or corporate FD, is a type of FD provided by corporations such as finance companies, housing finance companies, and other types of NBFCs. For many firms/ companies, company fixed deposits are an excellent means to raise capital from the public. A variety of rating organisations, like ICRA, CRISIL, and others, frequently grade these term deposits for their credibility.

Company fixed deposits are comparatively better than bank-fixed deposits as they offer higher interest rates. The FD rates change basis several factors. One of them is the repo rate change made by the Reserve Bank of India (RBI).

While investing in a corporate FD, you may want to choose issuers offering high-interest rates. However, it is equally important to check for the credibility of the financier, failure of which may lead to a risk of delays or defaults. Hence, it is best to choose a safe company fixed deposit accredited with high stability ratings by credit rating agencies like CRISIL and ICRA.

What to keep in mind when choosing a company FD?

  • Safety ratings: Some company fixed deposits are officially certified by credit rating agencies such as CRISIL and ICRA. This rating is done on a 14-point rating system, which determines the assumed risk levels. These will assure you of the company’s fixed deposit stability from time to time. The higher the rating, the safer your investment. You can also compare the track record of company fixed deposit rates and determine those offering higher interest rates. For instance, Bajaj Finance Fixed Deposit has ratings of CRISIL AAA/ STABLE and [ICRA]AAA(Stable), which is the highest in the industry.

  • Past repayment history: A company with timely interest payments and no default repayment of fixed deposits is ideal. For example, Bajaj Finance is one of the only NBFCs to have ‘0 unclaimed deposits’. This indicates the highest safety of your deposit and the assurance of timely payments and default-free experience. Additionally, the trust of more than 3 lakh happy FD customers and a deposit book of over Rs. 25,000 crore is a testament that Bajaj Finance is one of the most reliable FD issuers.

1. Safety ratings
Some company fixed deposits are officially certified by credit rating agencies such as CRISIL and ICRA. This rating is done on a 14-point rating system, which determines the assumed risk levels. These will assure you of the company’s fixed deposit stability from time to time. The higher the rating, the safer your investment. You can also compare the track record of company fixed deposit rates and determine those offering higher interest rates. For instance, Bajaj Finance Fixed Deposit has ratings of CRISIL AAA/ STABLE and [ICRA]AAA(Stable), which is the highest in the industry.

2. Past repayment history
A company with timely interest payments and no default repayment of fixed deposits is ideal. For example, Bajaj Finance is one of the only NBFCs to have ‘0 unclaimed deposits. This indicates the highest safety of your deposit and the assurance of timely payments and default-free experience. Additionally, the trust of more than 3 lakh happy FD customers and a deposit book of over Rs. 25,000 crore is a testament that Bajaj Finance is one of the most reliable FD issuers.

Benefits of investing in a company fixed deposit

1. Flexible periodic interest payout options
Companies like Bajaj Finance offer periodic payment options like monthly, quarterly and annually. These options can help you achieve a fixed income for your planned expenses. You also have the option to choose interest payout at maturity, which will help you create a sizeable corpus.

2. No effect of market fluctuations
FD rates are pre-determined and free from market fluctuations, and with a company fixed deposit, you can also earn higher interest.

3. Liquidity
A loan against a fixed deposit is readily available for up to 75% of the invested amount. Another way to achieve liquidity is the option of premature withdrawal with a minimal penalty.

4. Additional rate benefits
Company FDs offer benefits such as revision of interest rate based on your investment tenure.

Bajaj Finance FD offers interest rates up to 8.65% p.a. for tenure of 42 months. You can also calculate your fixed deposit portfolio returns by using the online FD calculator. You can adjust the tenure and the principal amount and see the maturity amount you will receive. It is a simple and valuable tool for portfolio planning.

Eligibility Criteria for Corporate/Company FD

The following entities qualify to apply for a corporate FD:

  • Indian Residents
  • Non-Resident Indians (NRIs)
  • Hindu Undivided Families (HUFs)
  • Clubs
  • Corporations
  • Associations
  • Societies
  • Educational Institutions
  • Partnership Firms
  • Cooperatives

Documents Required for Corporate FD

To open a corporate FD, the following documents are required:

  • Voter ID Card
  • Ration Card
  • Passport
  • Driver’s License
  • Aadhaar Card
  • PAN Card
  • NREGA Job Card
  • Valid Employee’s ID
  • Government-validated address proof
  • Two colour passport-sized photographs

Tax Implications on Corporate Deposits

Interest earned from corporate fixed deposits is subject to income tax based on your tax bracket. For instance, if you're in the 20% tax bracket, you'll pay 20% tax on the interest earned. If the interest earned in a financial year from a corporate FD is over Rs. 5,000, TDS (Tax Deducted at Source) is deducted as per the Income Tax Act. To prevent TDS deduction, the FD holder can submit Form 15G or Form 15H for senior citizens to the bank or non-banking financial institution.

Frequently asked questions

What is a corporate FD?

A corporate FD, also known as a company fixed deposit, is a type of fixed deposit offered by non-banking financial institutions or companies. Investors deposit a lump sum amount for a fixed tenure, and the company pays a predetermined interest rate on the deposit. Unlike traditional bank FDs, corporate FDs are not provided by banks but are offered by corporations, making them an alternative investment option.

What is the basic process of premature corporate FD withdrawal?

The basic process of premature corporate FD withdrawal typically involves submitting a request to the company or institution where the FD was made. The company will then calculate the applicable penalty for early withdrawal and provide the remaining amount to the investor.

When can the client apply for premature corporate FD withdrawal?

Clients can apply for premature corporate FD withdrawal before the maturity date, but they should be prepared to incur a penalty for early withdrawal.

Can you apply for a company FD online?

Yes, you can apply for a company FD online by visiting the company's official website or using their designated online platform. You may need to create an account, fill out the application form, and provide the necessary documents electronically.

What are the things to keep in mind while choosing Company Fixed Deposit?

When choosing a Company Fixed Deposit, consider factors such as the interest rate, credit rating of the company, tenure options, and withdrawal terms. Ensure that the company has a good reputation and a history of fulfilling its financial obligations.

What is the minimum tenure for a company FD?

The minimum tenure for a company FD can vary depending on the company's terms and conditions. Typically, tenures can range from a few months to several years, so investors should check with the specific company offering the FD for their minimum tenure requirement.

How to apply for a company FD?

To apply for a company FD, visit the company's official website or contact their designated offices or branches. Fill out the application form, provide the required documents, and make the deposit as per the terms and conditions.

Can we break corporate FD?

Yes, you can break a corporate FD before its maturity. However, this usually incurs a penalty, which can reduce the interest earned on the investment.

Are company FDs safe?

Company FDs carry higher risks compared to bank FDs. Their safety depends on the financial health of the issuing company. It’s crucial to check the credit rating before investing.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.