What is Corpus?
Corpus refers to the total amount of money invested in a financial scheme or fund. It represents the combined capital of all investors in a particular investment vehicle.
For example:
- If a mutual fund has 100 units, each worth ₹10, its total corpus is ₹1,000.
- If new investors contribute ₹300, the corpus grows to ₹1,300.
Corpus funds are commonly seen in mutual funds, retirement funds, and charitable organisations.
Understanding Corpus Funds
A corpus fund is created by corpus donations – donations specified by the donor for long-term use. The key features are:
- Restricted Funds: The funds are locked for specific purposes and cannot be used like regular donations.
- Unrestricted Purpose: Although corpus funds are restricted in usage, they can be used for any purpose within the organisation’s objectives.
- Long Term Security: Corpus funds are a financial safety net and can be used in emergency situations like an NGO’s survival.
- Legal Aspect: Without a written direction from the donor, a contribution cannot be considered as a corpus fund.
Uses of Corpus Funds
- Mutual Funds & Investments: Corpus is the total amount in which investors participate.
- NGOs & Charitable Trusts: Used as a reserve fund to ensure long term financial sustainability.
- Retirement & Pension Funds: Corpus is accumulated over time to provide post-retirement financial security.
A good corpus is important for growth and sustainability so that funds are available when needed.
