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Fixed Deposits in companies that earn a fixed rate of return over a period of time
are called Company Fixed Deposits. Financial institutions, Non-Banking Finance Companies
(NBFCs) and Manufacturing companies also accept such deposits. Deposits thus mobilized
are governed by the Companies Act under Section 58A. These deposits are unsecured,
i.e., if the company defaults, the investor cannot sell the documents to recover
his capital, thus making them a risky investment option. Company Fixed Deposits
are adequate for regular income with the option to receive monthly, quarterly, half-yearly,
and annual interest income.
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