What are Corporate Fixed Deposits?
Corporate FDs are fixed-income instruments offered by companies and NBFCs. You deposit a fixed amount for a chosen tenure and earn guaranteed interest at a pre-agreed rate — typically higher than bank FDs.
How do corporate FDs work?
You invest a lump sum for a fixed period. The company pays you interest at regular intervals (or at maturity), and returns your principal at the end of the tenure. Simple, predictable, and fixed.
What returns can I expect from corporate FDs?
Corporate FDs on Grip typically offer returns in the range of 6–9% p.a. — higher than most bank FDs — depending on the issuer and tenure.
What tenures are available for corporate FDs?
Tenures typically range from 7 days to 5 years, depending on the issuing company. Choose the duration that suits your financial goals.
Can I choose monthly, quarterly, or cumulative interest payouts?
Yes. Most corporate FDs offer flexible payout options: monthly, quarterly, or annual interest payouts, or a cumulative option where interest compounds and is paid at maturity.
What happens at maturity?
You receive your principal along with the final interest payout, and the FD is closed. Funds are credited directly to your registered bank account.
What risks are associated with corporate FDs?
Key risks: credit risk (the company may delay or default on payments), lower liquidity compared to bank FDs, and no deposit insurance (unlike bank FDs, which are insured up to INR 5 lakhs by DICGC). Always check the issuer's credit rating before investing.
How can I evaluate the safety of a corporate FD?
Check the issuer's credit rating (AAA and AA-rated companies are generally safer), review their financial health and track record, and prefer well-rated NBFCs or established corporates listed on Grip.
What is the minimum investment amount for corporate FDs?
Minimum investment in corporate FDs on Grip typically starts from INR 1,000, depending on the issuer.
Do I need a demat account to invest in corporate FDs?
No. Corporate FDs are held directly with the issuing company/NBFC — a demat account is not required.
Is premature withdrawal allowed?
Yes, most corporate FDs allow premature withdrawal after a minimum lock-in period. However, early withdrawal usually comes with a penalty on the interest earned. Check the specific terms of each FD before investing.
Are there any penalties for early withdrawal?
Yes. Early withdrawal typically results in a reduction in the interest rate applied — effectively a penalty on interest earned. The specific penalty terms vary by issuer.
How are corporate FD returns taxed?
Interest earned on corporate FDs is taxed as "Income from Other Sources" — added to your total income and taxed at your applicable slab rate.
Is TDS deducted on corporate FD interest?
Yes. 10% TDS is applicable if interest income exceeds INR 5,000 (for senior citizens and non - senior citizens both) in a financial year.
What is Form 121 and how can I use it to avoid TDS on FDs?
If your total annual income is below INR 4 lakhs, you may be eligible for TDS exemption. Under the new Income Tax Act, 2025 (effective April 2026), Form 15G and 15H have been replaced by Form 121 — a unified declaration form. Contact support@gripinvest.in for assistance or more details.
