Bank FD & Corporate FD

 Difference Between BANK FD v/s. CORPORATE FD

Bank FD

Corporate FD

  • ·        Bank FDs are issued by Banks.

  •          Corporate FDs are issued by nonbanking finance companies and other none finance companies.

  • ·        Period of Bank FD range from as little as 7days to up to 10 years.

  •          Period of Corporate FD range from about 6 months to 5 years.

  • ·        Generally offers relatively lower interest rates than other deposits.

  •           Generally, interest rates are 1-2 percentage higher than bank deposit.

  • ·        Interest is paid out at periodic intervals or cumulatively on maturity if the deposit.

  •           Interest is paid out periodically or cumulatively.

  • ·        Safer.

  •          Riskier.

  • ·        More liquid.

  •           Less liquid.

  • ·        Available at any time.

  •          Available only when company wants to raise funds.

  • ·        Interest will be taxed at slab rates.

  •           Interest is subject to tax at slab rates.

  • ·        If the interest earned in a financial year exceeds Rs. 10,000 TDS (Tax Deducted at Source) is applicable.

  •           If the interest income exceeds Rs. 5,000 TDS (Tax Deducted at Source) is applicable.

 

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