Why would you invest in Corporate Fixed Deposits over Normal Bank Fixed Deposits?
Today, each of us invests in various financial products, and the most preferred investment product is fixed deposits. However, with changing times, the FD Interest rates have fallen rapidly. So now, investors are shifting to new forms of investments to achieve or look for better gains. What if we tell you that you get higher returns with the same safety cushion that your bank fixed deposit offers? Here's the corporate fixed deposit, which has gained popularity over the period. You can invest in it for higher and assured returns.
Now that you are aware of these two Fixed Deposits Let’s deep dive and understand why Corporate Fixed Deposits are a much better option than a Normal bank FD?
| Fixed Deposit |
Corporate Fixed Deposits |
| • Interest Rates are Mostly Lower |
• Interest Rates are Higher in comparison |
| • The security provided is high |
• The security here is moderate |
| • Fixed deposit has a priority of providing a fixed rate of interest with higher security |
• Corporate FDs have a higher rate of interest as a priority and providing a fixed rate of interest |
Corporate FDs have a higher rate of interest as a priority and providing a fixed rate of interest
Corporate Fixed Deposits have a higher interest rate than normal bank FDs; hence you gain higher returns when it comes to corporate fixed deposits.
Bank FDs have modest interest rates, but corporate FDs always have a high-interest rate. The difference is usually between 1% and 4% of the total. Interest rates on corporate FDs typically range from 4% to 8%. Senior citizens can also profit from higher interest rates.
Some Tips on Corporate FDs to get you started with
To determine which Corporate FD companies are good and which are not, one should look at their credit ratings.
Investors should also consider the credit risk rating assigned to corporate FDs by various credit rating agencies. Because these credit ratings are based on the overall financial health of corporate FD issuers, investors can get a good idea of the credit risk involved in opening corporate FDs by consulting the assigned credit ratings.
Always consider the Company's credit rating, background, and repayment history when choosing a corporate FD to determine the stability and credibility of the Company you are depositing your money with.
As a result, investing in high-rated corporate FDs with an AA or AAA rating can be a good option for moderate-risk investors.
The bottom line is that a Corporate FD provides double protection by guaranteeing fixed income and paying higher interest rates than banks. So, when it comes to corporate FDs, always choose wisely and earn high returns.
Advantages and various aspects of Company FDs
Corporate FDs, which are offered by corporates and financial institutes
They are termed regular fixed deposits but provide a higher rate of interest.
The risk involved in these investments is low.
It can be flexible in some instances, in which you get to choose your tenor or the terms of maturity.
Corporate FDs can be liquidated easily, which depends on the terms and conditions of the corporate organization.
These accounts may provide premature withdrawals.
They provide ratings that indicate the safety of the FD; the agencies give these ratings like ICRA and CRISIL. You may choose one based on which ratings are high, and you can invest accordingly.