An informed decision and cautious approach with respect to Company Fixed deposits would ensure safety for one's money as well as lucrative returns. Hence this is an attempt to make an understanding of company Fixed Deposits

1. Marketing of Financial Services
Topic: COMPANY FIXED DEPOSIT

2. Outline
What
When
Why
Where
How
Six things Not to miss

3. Company Fixed Deposit
 The deposit placed by investors with companies for a fixed
term carrying a prescribed rate of interest
 Accepted by financial institutions and non-banking finance
companies
 Governed by the companies act under section 58A
 Unsecured
 Risky investment option

4. Which companies can accept Deposit
Companies registered under Companies Act 1956

5. What is the period of the Company deposit?
Manufacturing Company -from 6 months to 3 years.
Non-Banking Finance Company -from 1 year to 5 years period.
A Housing Finance Company -from 1 year to 7 years.

6. Tips for choosing a Corporate FD
Credit Rating
Company Background
Repayment History

7. Upto what limits can a company accept deposit?
 A Non-Banking Non-Finance Company(Manufacturing Company) -
 » Upto 10% of aggregate of paid-up share capital and free reserves if
the deposits are from shareholders or guaranteed by directors.
 » Otherwise upto 25% of aggregate of paid-up share capital and free
reserves.
 A Non-Banking Finance Company can accept deposits upto
following limits:
 » Equipment Leasing Company can accept four times of its net owned
fund.
 »Loan or investment company can accept deposit upto one and half
time of its net owned funds

8. Interest payments made in case of company FDS
 Interest is paid on monthly/quarterly/half yearly/yearly or on
maturity basis
 cheque or ECS facility.

9. TDS deducted on the interest from Company Fixed Deposits
TDS is deducted if the interest on fixed deposit exceeds
Rs.5000/- in a financial year.

10. Company Fixed Deposit is higher than Banks
2-3% higher than Bank Deposit rate

11. Documents required to open corporate fixed deposit
Can I withdraw this FD before the tenor expiry? If
yes, what is the impact on interest?

12. Key Benefits of Corporate FDs
 Higher Returns
 Flexibility
 Liquidity
 Lower Risk

13. Investing in company FD? Six things Not to miss
 Company FDs are risky
 TDS deduction
 Offer higher rate of interest
 Need for Safeguards
 Check the background of the company
 Tread with caution

14. BANK FDS OR COMPANY DEPOSITS
 Company deposit rates are generally 50-100 bps higher
that well-established bank FDs; senior citizens can earn
25-40 bps more than the normal rates on offer.
 The bank FD is a comparatively much safer financial
product which is a major reason why many put their
hard earned money into it
 Choosing a company deposit requires the same kind of
research and due diligence as is required while selecting
a stock.Those who do not have the wherewithal to do
this kind of research and take the risk, should stick to
bank FDs

15. You Tube Video
https://youtu.be/GHYzgdMoH1o