Corporate FDs

A fixed deposit issued by a company rather than a bank. You lend the company money for a set tenure and it pays you a fixed rate of interest. Because a company carries more credit risk than a bank, it pays more — which is exactly why the credit rating matters.

It carries credit risk: if the issuer defaults, your capital is at risk, and unlike a bank deposit there is no ₹5 lakh DICGC insurance. We reduce that risk by shortlisting only highly-rated issuers and by never concentrating your money in a single name.

Usually only after an initial lock-in of three to six months, and then with an interest penalty. Some issuers do not permit it at all. Plan the tenure properly rather than relying on an early exit.

Interest is added to your total income and taxed at your slab rate. The issuer deducts 10% TDS on interest above the threshold, which you adjust against your final liability.

Yes. Most issuers offer monthly, quarterly, half-yearly and annual payouts, or a cumulative option where interest compounds and is paid with the principal at maturity.

The issuer, and therefore the risk. A bank deposit is insured up to ₹5 lakh by the DICGC; a company deposit is not insured at all. You are paid roughly 1–2% more for taking that extra credit risk, which is only worth it with a strong issuer.

Yes. Most issuers add 0.25% to 0.50% for senior citizens, and a few now add a small extra for women depositors. It is applied at the time of booking, so the age on the application matters.

Generally not. Auto-renewal is rarely offered, so the deposit matures and the money is credited to your linked bank account. We flag maturities in advance so the money does not sit idle in a savings account.

If your total income is below the taxable limit, you can submit Form 15G (or 15H if you are a senior citizen) to the issuer at the start of the financial year. It stops the TDS, though the interest remains taxable if your income later crosses the limit.

No. The single biggest mistake in company deposits is concentration. We spread the money across issuers and stagger maturities, so a problem at any one company never threatens the whole allocation.

Instead of paying interest out periodically, the issuer compounds it and pays the whole amount with your principal at maturity. It suits people who want growth rather than income — though the interest is still taxed each year as it accrues.