What are Company/Corporate Deposits? A Complete Guide!

Company Corporate Deposits

Company or Corporate deposits are one of the most familiar topics with newbie investors. It’s more like fixed deposits but a more simple pattern. Though the adversity of NBFCs (Non-Banking Finance Company) the corporate/company market has seen a slowdown, yet it continues to attract and loyal investors, who prefer it than all other assets.

Below are the details of a corporate/company deposit in the finance world.

What are Company/Corporate Deposits?

In simple terms, corporate/company deposits are simple fixed deposits with flexibility. Unlike bank deposits, a corporate deposit has higher returns, minimum 6+ month’s lock-in period, higher than regular interest rates of traditional banks.

Further, in case of interest income revenue is less than five thousand a financial year, you get no TDS cut.

Any Indian or NRIs beyond the age of 18 years can move their deposits in a corporation/company bond. Similar to fixed deposits, withdrawal before the lock-in period ends is subject to penalty. The minimum lock-in period revolves around 3 to 6 months. The minimum amount of deposit you can do in a corporation or company is around 10000 to 25000 rupees. Based on your selection of company/corporate deposit, you may get assured returns that have a well-bound effect in your future investments.

Things to Consider Before Investing in Corporate/Company Deposits

It is always prudent to consider the below factors for investing in a corporate/company deposit:-

  • High rated companies with AA or more rates are beneficial if you want to ensure best results.
  • Check company credit, existing borrowings, profitability, balance sheets for better views.
  • Always consider expert financial advice before stepping into investment in corporate/company bonds.
  • Consider diversified allocation of your deposits rather than one single corporate/company deposit.

Overall, a corporate company deposit has opulent benefits than other financial planning. However, it is subject to risks of malpractice or frauds, for which you have to make a good background study before investing.