Corporate Fixed Deposit

Introduction of Corporate Fixed Deposit ( NBFC ) :- 

Corporate Fixed Deposit Means Customers to get the True Discounted Interest for there Deposit during the time of opening the Deposit need to use this product. The Interest type of this product is Fixed and Tax is Deducted on Interest .  While understanding the basic idea of a Non-Banking Financial Companies (NBFCs), we need to know what exactly NBFCs are. As per law, A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business lonas and advances, acquisition of shares/stocks/ bonds/ debentures/ securities issued by government or local authority or other marketable securities of a like nature,leasing, hire-purchase,insurance business, chit business but does not include any intitution whose principal business is that of agricutlure activity, industrial activity, purchase or sale of any goods (other than any securities) or providing any securities and sale/purchaes/construction of immovable property. In lay man lauguage Non-Banking Financial Companies (NBFCs) are the financial institution that offer the banking services but does not comply with the legal definition of a bank, i.e. it does not hold a bank license.

 Corporate Fixed Deposit Rate are as follows :- 

Company Fixed Deposit is the amount deposited by investors for a fixed period of time with a company which offers a fixed rate of return. These deposits are accepted by manufacturing companies, financial institutions and non-banking finance companies, and are governed by Companies Act 58A. Here’s a list of all the products:

   Benefits of company Fixed Deposit :- 

Higher interest rate: - The rate of interest is 2-4 percent high, as comared to the interestrate offered by bank of fixed deposits.

Regular income: - Depending on the scheme, investors have the option to receive interest at monthly/quarterly/half-yearly/yearly intervals.

Lock-in period:- The minumum lock-in period is threee months, 3 to 6 Month investor can withdraw but given ROI is only 4%, investors can withdraw thier money post six months.

TDS:- TDS is not applicable if interest earned is equals to or less than 5,000 for a year in a single company.

  Key Benefits :- 

•    Higher rates of interest.
•    Flexible tenure ranging from 1 year to 10 years.
•    Senior citizen benefits available.
•    Prematurity clause is available.
•    Loan facility available. 
•    Nomination facility available.
•    No TDS in case the interst is only Rs. 5000 in one financial year.
•    Regular interest incomes- Monthly, Quarterly, Half-yearly or Yearly. 

 Salient features of company Fixed Deposit :- NBFC

Investment Period :- The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 120 months. They connot accept deposits repayable on demand. 

Company act :-  Company Fixed deposit ( NBFC) are coverd under indian companies Act 1956.

Interest Rate :-  ( NBFC) rate is always high compared to the rate of interest offered by Bank on fixed deposit.

 Annual Yield :- Is the iffective annual rate of return,taking into account the effect of compounding interes. Its utility lies in its to standardize, varying  interes-rate arrangments into an annualized percentage number for comparison.

Compound Interest :- The ability of a fixed deposits in India to generate interest, which is then reinvested in order to generate further earnings is known as compound interes 

Fixed Deposit Account :- Fixed Diposits in India are deposits for a fixed or specified period chosen by the depositor and are repable on expiry of that period. Such deposits generally carry comparatively higher rate of interest depending on the time span.

Future Value :-  The original amount plus the compound interest thereon, stated as of a specific future date.

Joint Account :-   A Fixed Deposits account that is owned together(jointly) by two or more people. The depositors can decide whether transactions  require the signatures of all parties or whether one party can take actions on his/her own.

Know Your Customer(KYC) :-  KYC norms were introduced by the RBI to ensure customer identification and help control financial frauds, identify money  laundering & suspicious avtivities. To comply with this requirement,NBFCs require the following documents for new depositors- photo, PAN card copy, identification proof and address proof.

Maturity Date :-  The date on which the principal amount of any debt instrument becomes due and is repaid to the investor and interest  payments stops.

Nomination :-  Companies ask their FD holders to make nominations, which mean that they should nominate persons to whom the fixed deposit amount should go in the event of their death. Nomination can be made in Fixed Deposits Application form itself or on a separate form indicating the name and address of the nominee.

Non-Resident Fixed Deposits :-  Non-Resident Fixed Deposits are those, which are maintained by Indian nationals and persons of India origin resident aborad, foreign nationals and foreign companies in India. Few Companies accept ordinary Non-Resident Fixed Deposits in the names of  private individuals, provided initial deposits for investing in the Fixed Deposits are done through NRO Account.

NRO :-   NRO stands for Non-Resident Ordinary account. It refers to the Savings or Fixed Deposit account of a Non-Resident India in  a bank in India. This is a Rupee account. Inerest earned in this account is taxable. The account can be jointly held with a resident  India. The principal and interest in this account are non-repatriable.

Principal :- The original amount invested is called the principal amount.

Tax Deducted at Source(TDS) :-   As per the tax rules, any person/institution making payment on salaries, rent, interest,commission etc. requred to deduct tax before  making payment. This deduction is called Tax Deducted at Source(TDS). In the case of banks,TDS is deducted only if the interest  earned (both paid and accrued) is more than Rs. 5000 in a single branch. The bank also has to file the appropriate form (Form 16A)  annually showing the varius details of the deductions made and deposit of tax thereon. This form is needed file filing the annual tax    return for the individual. Powered by Bajaj Capital Financial Services Limited.

15G  Applicabale :- Form 15G is a declaration that can be fulled out by bank fixed deposit holders ( individuals less than 60 years of age and HUF) to ensure that no TDS ( tax deducation at  source ) is deducted  form their interest income for the fiscal, while Form 15G is for everybody else.

15H  Applicable :- Form 15H are documents you can submit to make sure TDS is not deducted form your income if you meet the conditions below... Form 15H is for senior citizens; those  who are 60 years or older,     

  Who can Invest In Company Fixed Deposit :-  

   NRI Deposit :- 

Invested Fund  :- Funds to be invested from NRO ( Non Resident Ordinary ) bank accounts only . Funds from NRE ( Non resident external ) bank account will not be accepted .     

Paymen Mode :-Payment is accepted only through cheque or RTGS/NEFT from NRO bank account . Payment through demand draft , Debit card, IMPS or UPI is not allowed, Loan against Fixed Deposit is not  available from NRI/OCI/PIO.

Loan Facility :-Loan against Fixed Deposit is not available for NRI.

FAQ :- However before you start investing , here are some consideration you must keep in mind. As an NRI, you can invest your money only through NRO( Non -Resident Ordinary ) accounts.      

    Important Things to Consider:-

Investors must carefully read the application form 

Check Application all paper and imoportant thinngs before putting money into it

Check The Rating before investing amount 

Companies may change the interest rates on the Fixed Deposit without any prior noitice        

  Disclaimer :-

Meghama Capital ( Meghama Wealth Management Services ) Only act as between client and the company inviting or Accepting Fixed deposit , known as principle company, Naither company,Employee certified the information provided by the Principle Company and shall not be liable under any condition.

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