How to Apply for a Corporate FD in India
Similar to banks, many non-banking financial companies (NBFCs) and finance houses in India allow investors to open fixed deposit (FD) accounts for a pre-determined period. These are known as corporate fixed deposits. These company deposits provide assured returns with flexible maturity durations like bank FDs. Moreover, compared to banks, NBFCs and other companies provide higher interest rates on corporate deposits, making these an attractive investment option.
How to apply for corporate FDs
The corporate FD application process anddocumentation requirements may vary among issuers. Generally, you need to follow the steps given below to open a company FD online.
- Visit the issuer’s website and check the fixed deposit eligibility criteria
- Provide your personal details like name and date of birth along with your contact information including mobile number and email address
- Enter the principal amount, FD tenure, and other necessary details like the nominee’s name and date of birth
- Provide the required documents, which include your Permanent Account Number (PAN) card, photograph, passport, and Aadhar card
- Confirm the details and make an online payment
Alternatively, you may apply for an FD offline by visiting the issuing company’s closest branch.
Things to consider while applying for corporate FDs
Although corporate FDs are unsecured and not covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC), all issuing companies have to follow some stringent guidelines and rules laid down by the Reserve Bank of India (RBI). Here are three things to know before investing in company deposits.
- Non-banking FD-issuing companies have to procure a rating for their products from a credit-rating agency like CRISIL. A higher rating indicates lower risk; so, it is advisable to look for the credit rating before applying for a company FD.
- Corporate fixed deposit interest rates may vary from company to company. A particular issuer may offer a higher rate compared to another issuer; so, it is recommended to compare the interest rates offered by different institutions before investing in an FD.
- Some companies may have limitations on the minimum and maximum amounts; knowing these before applying for an FD will help you make an informed decision.
If you do not want to invest in riskier financial options, investing in company FDs is your best bet. The Fixed deposit rates are higher than a bank, ensuring attractive returns on your investment. To apply for reliable, CRISIL FAAA-rated FDs, visit Mahindra Finance’s website and know more about their products.