Corporate Fixed Deposits (CFDs) are fixed deposits offered by corporate, financial institutions and Non-Banking Financial Companies (NBFCs). They offer a prescribed rate of interest over a period of time, usually ranging from 1 to 7 years.
Investment in debt instruments with a moderate risk appetite.
Start investing from as low as Rs. 1,000.
Attractive returns at interest rates higher than Bank FDs.
Minimum lock-in is for just 6 months, post which corporate FDs can be redeemed.
Most issuers offer monthly, quarterly, bi-annual and annual interest payments.
Here are four parameters to guide you to choose the right Corporate FD to invest in.
Higher the rating, more secure your investment will be. Hence, always choose Corporate FDs with high ratings.
Check the financial health of a company before investing, and know the purpose of the company for raising funds.
Verify if the company has paid regular dividends or defaulted on payment to deposit holders in the past.
nterest income from Corporate FDs is taxable. Tax deducted at source (TDS) will be deducted if the interest on a company FD exceeds Rs.5,000 in a financial year.
Investors run the risk of losing their capital in case the company defaults.
Principal company, without any prior notice, can revise the interest rates of the fixed deposit.
Indusind Securities is a distributor of Mutual Funds, Portfolio Management Services(PMS), Corporate Fixed Deposits, Bonds/NCDs, Insurance, IPOs, Structured Products and Loans.
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