BANK FD v/s CORPORATE FD

Bank FD

• Bank FDs are issued by Banks.
• Period of Bank FD range from as little as 7days to up to 10 years.
• Generally offers relatively lower interest rates than other deposits.
• Interest is paid out at periodic intervals or cumulatively on maturity if the deposit.
• Safer.
• More liquid.
• Available at any time.
• Interest will be taxed at slab rates.
• If the interest earned in a financial year exceeds Rs. 10,000 TDS (Tax Deducted at Source) is applicable.

Corporate FD

• Corporate FDs are issued by nonbanking finance companies and other none finance companies.
• Period of Corporate FD range from about 6 months to 5 years.
• Generally, interest rates are 1-2 percentage higher than bank deposit.
• Interest is paid out periodically or cumulatively.
• Riskier.
• Less liquid.
• Available only when company wants to raise funds.
• Interest is subject to tax at slab rates.
• If the interest income exceeds Rs. 5,000 TDS (Tax Deducted at Source) is applicable.

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