What are Company Fixed Deposits?
The deposits made by investors in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. Along with manufacturing companies, financial institutions and Non-Banking Finance Companies (NBFCs) also accept these deposits.
Fixed Deposit (or FD) is a low-risk financial instrument that is offered by banks, post offices or Non-Banking Financial Companies (NBFCs). You can easily invest in a Fixed Deposit and grow your savings at a fixed rate of interest, which is higher than interest rates offered by savings accounts. The convenience of investing along with the safety of your deposit can help you plan your short-term and long-term goals easily.
Benefits of Company Fixed Deposits
- Higher interest rate: The rate of interest is 2-4 percent high, as compared to the interest rate offered by banks on fixed deposits
- Regular income: Depending on the scheme, investors have the option to receive interest at monthly/quarterly/half-yearly/yearly intervals
- Lock-in period: The minimum lock-in period for most of the schemes is six months, i.e. investors can withdraw their money post six months, anytime
- TDS: TDS is not applicable if interest earned is equals to or less than 5,000 for a year in a single company.