FIXED INCOME
Fixed Income Options
Beyond the bank deposit - three ways to hold fixed income, and what each one asks of you.
Fixed income is not one product. A bank FD, a company deposit, a private credit fund and a structured debenture sit under the same heading and behave very differently in who owes you the money, when you get it back, and how it is taxed.
AK Investments distributes three fixed income options alongside secured bonds. Each is sourced from leading issuers and fund houses, and each is matched to the investor rather than the other way round.
The three options
Corporate Fixed Deposits
A fixed-tenure deposit with a rated company, NBFC or housing finance company. A contracted rate, a fixed maturity date, and a payout schedule you choose. The closest cousin to a bank FD with the borrower, and therefore the credit risk, being different.
Debt AIF
A SEBI-registered fund that lends. Capital is pooled and deployed by a professional manager into secured, performing credit. No contracted rate; returns follow the underwriting. Built for investors who can commit ₹1 crore and stay invested for the fund’s tenure.
Market Linked Debentures
A debenture whose return is tied to a market reference an index, a G-Sec yield, a commodity rather than a fixed coupon. Defined tenure, defined payoff formula, listed on the exchange.
At a glance
| Corporate FD | Debt AIF | MLD | |
| Return | Contracted rate | Manager-driven, variable | Linked to a market reference |
| Typical entry | ₹10,000 onwards | ₹1 crore (SEBI minimum) | ₹1 lakh face value |
| Tenure | 12–60 months | 3–5 years, close-ended | 1–5 years |
| Income | Periodic or cumulative | Periodic distributions | Mostly at maturity |
| Liquidity | Exit after lock-in, at lower rate | Locked for fund tenure | Listed, thinly traded |
| Taxed as | Interest, at slab rate | Pass-through to investor | Short-term gains, at slab rate |
| Regulated by | RBI / Companies Act | SEBI (AIF) Regulations | SEBI |
Indicative of how each instrument is generally structured. Terms differ by issuer and scheme.
Not sure which fits? Talk to a Chartered Accountant, not a call centre.
Frequently Asked Questions
What are Fixed Income Options?
Fixed income options are investments that pay a pre-defined return, usually as periodic interest, and repay the principal on maturity. Common examples include bonds, non-convertible debentures (NCDs), corporate fixed deposits, market linked debentures and debt AIFs. They suit investors seeking regular income and more predictable returns than equity, though returns are not guaranteed and carry credit risk.
What are Corporate Fixed Deposits?
Corporate Fixed Deposits are term deposits offered by NBFCs and housing finance companies. Like bank FDs, they pay a fixed interest rate for a chosen tenure, with monthly, quarterly, annual or cumulative payout options. They usually offer higher rates than bank FDs, but are not covered by DICGC deposit insurance, so the issuer’s credit quality matters.
What is a Debt AIF?
A Debt AIF is a SEBI-registered Alternative Investment Fund, usually Category II, that pools money from investors and lends it to companies, mainly through privately placed bonds, NCDs and structured credit. It aims for higher yields than traditional debt instruments. The minimum investment is generally ₹1 crore, suiting high-net-worth and institutional investors.
What are Market Linked Debentures (MLDs)?
Market Linked Debentures (MLDs) are debt instruments whose returns are linked to an underlying market reference, such as the Nifty 50 index or a government security price. The payout is calculated on maturity using a pre-set formula. In principal-protected MLDs, the face value is repaid on maturity, subject to the issuer’s credit. Gains are taxed at slab rates.
What factors should I consider before investing in Corporate Fixed Deposits?
Check the issuer’s credit rating from agencies such as CRISIL, ICRA or CARE, and its repayment track record. Compare the interest rate with bank FDs and similar-rated issuers. Also review the tenure, payout frequency, premature withdrawal terms, TDS applicability and how much of your portfolio you place with one issuer.
How does a Debt AIF work?
Investors commit capital to the fund, which is drawn down in stages as the fund manager finds lending opportunities. The fund lends to companies through structured debt, earning interest and fees. Returns flow back to investors as periodic distributions and principal repayment. Category II AIFs are close-ended with a minimum tenure of three years, so early exit is limited.