What Are Corporate Deposits?
- These types of deposits are offered by corporate companies
- Generally, banks are the issuers of fixed deposits services or products in India
- But there are other non banking institutions that offer similar deposit products to investors. These corporate entities could be involved in various businesses & may require capital to fund their operations
- In such scenario, they issue deposit certificates to the investors of different tenures at fixed interest rates
- These types of deposits offer high interest rates than the ones offered by banking institutions. Hence, investors prefer to include corporate deposits in their investment portfolio
- A well chosen corporate deposit scheme will yield great returns for an investor
- Though these type of deposits offer higher interest rates, there is also a slightly higher risk associated with them. One must factor the credit risk of a company before investing
