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Corporate Fixed Deposits


Corporate fixed deposit is a deposit in company for a fixed rate of return over a fixed period of time. The rate of interest is determined by the tenure of the deposit as well as other factors. NBFC’s, Housing Finance & Manufacturing companies accept such deposits. The corporate fixed deposit is governed by section 58A of the Companies Act. Company fixed deposit is a good option for investment as they provide higher rate of interest compared to bank deposits. They are a good source of regular income by means of monthly, quarterly, half-yearly, or yearly interest incomes. Performance of the company should be reviewed from time to time and at the maturity of deposit, by analyzing Balance Sheet & Share Prices movement. This will be helpful in deciding whether the deposit should be renewed or not.


  • 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 interest is only Rs. 5000 in one financial year.
  • Regular interest incomes – Monthly, Quarterly, Half-yearly, or Yearly.

Capital Gain Bonds (54EC Bond)

  • In accordance with section 54 EC of the Income Tax Act, 1961, all categories of tax payers would be eligible to save tax in respect of long term capital gains by making investments in certain Bonds prescribed.
  • These bonds are classified as ‘long-term specified asset’ and are issued by REC, NHAI, PFC and IRFC.
  • These bonds are specifically for investors who have made some long term capital gains, and would like to save capital gain taxes on this amount.
  • Only long term capital gains are eligible for these bonds though, and short term gains are not covered under section 54EC.
  • The interest from these bonds is fully taxable
  • The entire capital gain realized is invested within 6 Months of the date of transfer in eligible bonds
  • Such investment is held for 3 Years
  • To avail of capital gain exemption, the bonds so acquired cannot be transferred or converted into money or any loan or advance can be on security of such bond with 3 years from date of acquisition else, the benefit would be withdrawn.
  • If the amount invested in bonds is less than the capital gains realized, only proportionate capital gains would be exempt from tax.