Corporate Fixed Deposits / Company Fixed Deposits
Fixed deposits, commonly referred to as FDs, offer a straightforward and secure
way to grow your savings. These involve entrusting a sum of money to an institution
for a predetermined period, which can range from a few months to several years.
In return, you receive a fixed interest rate on your deposit for the agreed-upon
There are two primary categories of fixed deposits: bank FDs and corporate FDs.
Bank fixed deposits entail placing your money in a bank, and during the deposit’s
term, you earn interest on the deposited amount.
In contrast, corporate deposits, often known as company fixed deposits, invest your
money with non-banking financial companies (NBFCs) and other financial institutions
for a specified period, and you receive a fixed interest rate on your deposit.
CHOOSING THE RIGHT CORPORATE FIXED DEPOSIT
With a plethora of investment options available, it’s essential to carefully choose
one that aligns with your unique financial objectives. Before making a final decision,
meticulously assess whether your selected corporate FD meets these critical criteria:
When selecting corporate FDs, a critical factor to consider is the credit rating
assigned by reputable agencies such as CARE, ICRA, and CRISIL. A higher credit rating
denotes a lower risk of default, enhancing the security of your investment.
Opting for corporate FDs issued by companies with a proven track record of stability
and positive performance is a wise decision, as it enhances the security of your
investment while ensuring assured returns.
REPAYMENT TRACK RECORD
A company’s creditworthiness and its commitment to timely returns are significant
factors to consider when selecting a corporate FD. Equally important is the company’s
impeccable and unblemished repayment history, which serves as a testament to its
reliability and financial stability.
While attractive interest rates offered by corporate FDs may initially entice investors,
they should not be the sole deciding factor. A comprehensive assessment of other
crucial aspects is essential to make an informed investment decision when it comes
to picking a Corporate FD.