Company Fixed Deposits in India
Types of company FD: There are two types of fixed deposit schemes namely cumulative and non-cumulative fixed deposit schemes. Non Cumulative schemes as the name suggests pay off the interest earned on investment on regular basis (half yearly basis or annual basis) so the interest will not get acquired on principal to earn higher interest in the years to come. Cumulative fixed deposit scheme on the other hand where the interest accumulates with principal so as to earn higher returns when compared to non-cumulative plan. This scheme pays interest accrued on deposit schemes on maturity of the deposit.
- The company where the investment as deposit is made should be authorized by the Reserve Bank of India to accept money for fixed deposit schemes and the registration of permission for such schemes should be displayed in the offices of the company.
- Rating of a company plays a major role while investing in fixed deposit schemes. This rating process renders the company’s worthiness for investment. Companies with lower rating in a financial span can also be denied permission to offer fixed deposit schemes. There are set of instructions wherein the company will have to inform the RBI about the financial crisis (if there are any) within certain duration and then stop accepting public deposits.
- The interest rate provided on fixed deposits of companies is regulated by RBI.
- The person who has issues related to receiving interest earned on deposits or principal can approach Company Law Board and launch a complaint in this regard. The board would direct the company and arrive at solutions to the problem faced.
- Interest rates in general are 2 to 3% higher than bank fixed deposits
- On a short term they earn better income with good liquidity
- The deposit scheme also has nomination facility
- The application process and eligibility clauses are much simpler than those of regular bank fixed deposit scheme
- Bajaj Capital
- Mahindra Finance