Corporate Fixed Deposits

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A fixed deposit is an investment product offered by banks and NonBanking Finance Companies (NBFCs). Fixed deposits have been the most sought-after saving option for many generations to this day. They are the simplest financial instruments to understand. That makes them a favorite of most Indian households. Almost everyone knows how they work. You deposit some money with a bank or NBFC for a set amount of time and get a fixed rate of interest

Corporate fixed deposits is a deposit wherein you put your money for a fixed tenure at a fixed rate of interest, not with banks but with nonbanking financial companies (NBFCs) and other financial institutions. Compared to a regular bank fixed deposit, they fetch a higher rate of interest. The maturities of company FDs range from a few months to a few years. Like bank FDs, corporate FDs also offer some incremental interest for senior citizens.

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It is ideal to invest in a high-rated corporate deposit with AAA or equivalent rating. It signifies the highest safety with regard to payment of interest and the principal. As you go lower in the rating chart, the degree of safety reduces. The interest rate difference between regular Bank FDs and corporate fixed deposits is generally in the range of 1% to 3%. This seemingly small difference can have a sizable impact on your corpus in the long run.

Similar to Bank FDs, a corporate fixed deposit can also be used to avail loan facility when you require the funds in case of an emergency. The sanctioned amount can vary from one financial institution to the other. Usually, it can go as high as 75% of the fixed deposit amount.

What we can do for you

We can get you invested in Corporate FDs of reputed NBFCs with good credit ratings like HDFC Limited, ICICI Housing Finance Limited, Bajaj Finserve Limited, PNB Housing Finance Limited, M&M Finance Limited, and many more.

Benefits of Investing in Corporate Fixed Deposits
Investing in corporate fixed deposits of NDFC (National Development Finance Corporation) can offer several benefits to investors, including:

  1. Higher Returns: Corporate fixed deposits of NDFC generally offer higher returns compared to traditional savings instruments such as savings accounts, fixed deposits in banks, and government bonds.
  2. Stable Returns: Since the interest rates are fixed for the entire tenure of the deposit, investors can expect stable returns throughout the investment period.
  3. Low Risk: Corporate fixed deposits of NDFC are generally considered to be less risky compared to investing in equities. NDFC is a government-owned entity, which offers a certain level of safety and assurance to investors.
  4. Flexible Tenure: Investors can choose the tenure of their investment based on their financial goals and requirements. NDFC offers a range of tenure options, usually ranging from one to five years.
  5. Liquidity: In case of emergencies, investors can withdraw their deposits prematurely by paying a penalty. However, it is important to note that premature withdrawal may result in lower returns.

Overall, investing in corporate fixed deposits of NDFC can be a good option for investors who are looking for stable returns with lower risk. However, investors should always do their due diligence and carefully evaluate the risks and benefits before making any investment decisions.

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