Corporate Fixed Deposits

Sarvottam Wealthnetwork Private Limited

Dahyabhai Patel, Director
M.Sc., C.I.A., Certified Financial Planner

Login Inquiry Now Invest Now

Creating Wealthy & Happy Families, Ethically

Your trusted partner in ethical wealth creation with 18+ years of experience, ₹65+ Cr AUM, and 500+ happy clients across the globe.

Page Title

Home / Corporate Fixed Deposits

Corporate Fixed Deposits

Fixed income products form the foundation of a strong financial plan. Just like a building needs a solid base, a portfolio requires stable investments to reduce overall risk. Allocating a significant portion of funds to fixed income instruments can enhance the stability and predictability of returns.

When choosing between fixed deposits and investment bonds, it’s important to assess the pros and cons of each based on your financial goals and risk tolerance. The effectiveness of any investment depends on how well it aligns with your individual needs.

Link Name

What is a Corporate Fixed Deposit?

Corporate Fixed Deposits are term deposits offered by companies, including Non-Banking Financial Companies (NBFCs) and other financial institutions, that provide a fixed rate of return over a specified tenure. These deposits are governed by Section 58A of the Companies Act.

Unlike bank FDs, corporate FDs are unsecured—meaning if the company defaults, investors do not have claimable collateral. Therefore, while they offer attractive returns, they also carry a higher level of risk.

Benefits of Investing in Corporate FDs

  • Higher interest rates than traditional bank FDs.
  • Short-term investment options, often starting from as low as 6 months.
  • Low lock-in period – typically just 6 months.
  • No TDS (Tax Deducted at Source) if interest income is up to ₹5,000 in a financial year.
  • Diversification – invest in multiple companies to keep interest from each under ₹5,000 and spread the risk.

Best Practices for Investing in Corporate FDs

1. Diversify Your Risk
Avoid concentrating your investment in a single company. Ideally, allocate no more than 10% of your total portfolio to one corporate FD. Spread your investments across companies in different sectors to reduce exposure to industry-specific risks.

2. Choose the Right Tenure
A term of 1 to 3 years is generally ideal, depending on prevailing interest rates. Avoid locking in for long durations with companies unless you're confident in their long-term performance.

3. Review Periodically
Assess the financial health of the company at maturity. Use indicators such as share prices, credit ratings, annual reports, and media coverage to decide whether to renew or reshuffle your deposit.