Corporate fixed deposit is a deposit in company for a fixed rate of return over a fixed period of time. The rate of interest is determined by the tenure of the deposit as well as other factors. NBFC’s, Housing Finance & Manufacturing companies accept such deposits. The corporate fixed deposit is governed by section 58A of the Companies Act.Company fixed deposit is a good option for investment as they provide higher rate of interest compared to bank deposits.
They are a good source of regular income by means of monthly, quarterly, half-yearly, or yearly interest incomes.Performance of the company should be reviewed from time to time and at the maturity of deposit, by analyzing Balance Sheet & Share Prices movement. This will be helpful in deciding whether the deposit should be renewed or not.