types of inter-corporate deposits. merits and demerits of inter-corporate deposits


There are three types of inter-corporate deposits.
  1. Three-month deposits
  2. Six-month deposits
  3. Call deposits
Merits of ​inter-corporate deposits

1. These deposits help corporate's in solving their short-term requirements of funds.
2. These deposits are free from legal formalities.
3. There exists secrecy in the market of inter-corporate deposits.

Demerits of ​inter-corporate deposits​

1. Risk factor is high in this market as it is not well organised market and only little information about transactions in the market are known publicly.  
2. ​The interest paid on these deposits is higher than the interest paid on bank deposits.  
3. Raising funds through this market require personal contacts

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