Practicing Success
Which of the following is not a type of Inter Corporate Deposits? |
Three months deposits Six months deposits Nine months deposits Call deposits. |
Nine months deposits |
The correct answer is option 3- Nine months deposits. Inter Corporate Deposits are unsecured short-term deposits made by a company with another company. ICD market is used for short-term cash management of a large corporate. As per the RBI guidelines, the minimum period of ICDs is 7 days which can be extended to one year. The three types of Inter Corporate Deposits are: (i) Three months deposits; Interest rate on ICDs may remain fixed or may be floating. The rate of interest on these deposits is higher than that of banks. These deposits are usually considered by the borrower company to solve problems of short-term funds insufficiency. |