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The Corporate Fixed Deposits, as the name suggests are like any other Fixed deposits issued by the banks. It has also got some characteristics of fixed deposits with some restrictions. The Corporate Fixed Deposits are issued by the Public and Private Limited companies. It is governed by Section 73 of the Companies Act. It is also called Company Deposits. Bank Deposits are governed by the Banking Regulation Act.

[Why Companies Take Deposits]

The companies require funds for their business activities. Normally they take loans from banks. The interest rate on these loans is comparatively higher. To reduce interest cost, companies invite deposits from the general public. The interest on these deposits is generally 3-5% less than the interest on the loans taken from banks. This helps them in reducing the cost of production. Thereby keeping the cost of their products competitive in the market.


Financial companies and Non-Banking Financial Companies (NBFC) are allowed to take deposits from the public. But for Public and Private Limited companies the issuing of Corporate fixed Deposits is subject to the provisions of Section 73 to 76 of the Companies Act,2013.

A Public Company likely to take deposits from the public must have Net worth of Rs 100 Crs or Turnover of not less than Rs 500 Crs. The Company has to obtain shareholders’ consent through Special Resolution and the same has to be filed with the Registrar of Companies before accepting the deposits from Public.

Conditions Precedent to obtention of deposits from public

The companies have to necessarily fulfil the following conditions before accepting deposits from the public:

  1. Deposits shall not be repayable on demand.
  2. The period of deposits shall not be less than 6 months. The company may accept the deposits for their short-term requirement for not less than 3 months. But such deposits should not exceed more than 10% of their paid-up share capital and free reserves.
  3. Company has to issue an advertisement in a new paper in form-DPR-1 for inviting deposits from the public.
  4. Company cannot accept the deposits from public exceeding 25% of its share capital and free reserves. In the case of Government companies limit is 35%.
  5. Company shall obtain the Credit Rating from accredited agencies at the time of accepting the deposits and every year thereafter. The same shall be informed to the Registrar of companies in form-DPT-3.
  6. Company shall maintain a Repayment Reserve Account and keep a minimum of 20% of the number of deposits maturing during the following financial year.