Write Short Note on Inter corporate Deposits : - Vidyadip

Question

Write Short Note on Inter corporate Deposits :

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Answer

Inter company deposits are used to satisfy short-term need of finance. One company needs finance and the other company gives as deposit is called 'inter company deposit'.
Mostly such transactions are carried on by dominating company and its subsidiary company or other companies managed by the same group.
The rate of interest is determined on the basis of contract between them. The user company pays interest. Through this source short term financial need is satisfied.

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