Reserve Bank of India (RBI) Banks have reduced interest on fixed deposits (FD) since the second consecutive cut in repo rape. This will affect investors. The return of them on FD will be reduced. In such a situation, if you are thinking of doing FD now, then the opportunities are still not over. You can choose the option of corporate FD. Corporate FD is still getting interest up to 9.40%. After all, what is corporate FD and how you can invest in it. What do you take care of? Let us give you complete information.
| Company name | credit rating | Interest rate (general) | Interest rate for senior citizens | Investment period |
|---|---|---|---|---|
| Shriram finance | ICRA AA+ | Maximum 8.80% | Maximum 9.40%* | 1 to 5 years |
| Bajaj finance limited | Crisil faaa | Maximum 8.35% | Maximum 8.60% | 1 to 5 years |
| Mahindra finance | Crisil Aaa | Maximum 8.10% | Maximum 8.35% | 1 to 5 years |
| Muthoot Capital Services | Crisil A+ | Maximum 8.38% | Maximum 8.88% | 1 to 5 years |
| PNB Housing Finance | Crisil AA+ | Maximum 8.00% | Maximum 8.30% | 1 to 10 years |
| ICICI Home Finance | Crisil Aaa | Maximum 7.80% | Maximum 8.05% | 1 to 10 years |
| LIC Housing Finance | Crisil Aaa | Maximum 7.75% | Maximum 8.00% | 1 to 5 years |
What is corporate FD?
Corporate FD or company fixed deposit is issued by non-banking finance company i.e. NBFC companies. In simple terms it is also called a company deposit. In this too, a fixed interest rate is given to investors like bank FDs. Its duration can range from a few months to years. Only NBFC companies recognized by RBI can accept deposits in corporate FDs.
What is the difference between bank and corporate FD?
The biggest difference between bank FD and corporate FD is that due to the issuance of corporate FD NBFC, it is high in the interest rate, which attracts more towards corporate FD. The time limit is an important role in the interest rate here like a bank FD.
Bank FD and corporate FD is the second difference security. Insurance is given by DICGC up to Rs 5 lakh in bank FD. In such a situation, if the bank sinks, the money will be given to the investor who provides the FD by DIGC. At the same time, there is no such insurance in corporate FD. If the NBFC company sinks, then your money also sinks with it.
Do check rating before investment
Before investing in corporate FD, it is better to compare corporates first and check if they have a better rating of Care, CRISIL and ICRA. AAA rating is considered the best. Investors should also see track records of the company’s benefits and disadvantages. Most banks impose penalty on FD investors for premature withdrawal. This usually occurs about 3 months after investment.
Disclaimer: This article is written only for the purpose of information. Before any type of investment or before taking financial risks, consult your financial advisor. India TV will not be responsible for any type of risk.
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