Corporate FD vs Bank FD
Fixed Deposits (FD) are savings instruments that come with a higher interest rate when compared to regular savings accounts. It is a term deposit where in the investor invests a lump sum amount at once and earns interest at regular intervals until the maturity date.
FDs are one-time investments and the investor doesn't have to make deposits every month.
Bank Fixed Deposits - Features and Benefits
- Cumulative and non-cumulative FDs are offered.
- In case you have a savings account with the bank, additional benefits may be provided.
- Premature withdrawal may be allowed. However, a penalty may be levied in the case of premature withdrawal.
- FDs are offered by banks and Non-Banking Financial Companies (NBFCs).
Corporate Fixed Deposits
- Credit agencies such as CRISIL and ICRA provide safety ratings.
- Cumulative and non-cumulative interest-payout options are provided.
- You can use the money for any purpose.
- Premature withdrawals may be offered without any restrictions.
- The tenure of the deposit can be selected.
- The risk involved is low.
- Higher interest rates are offered when compared to regular FDs.
- Financial institutions and companies offer the scheme.
Corporate Fixed Deposit vs Bank Fixed Deposit
Terms | Bank Fixed Deposit | Corporate Fixed Deposit |
Offered by | Bank | Corporate company |
Rate of interest | Average | High |
Tenure period | Ranges from months to years | 6 months to 3 years |
Risk involved | Low | High |
Medium of investment | Certificate of deposit | Certificate of deposit |
Top Bank Fixed Deposits in India
Listed below are the top bank fixed deposits in India.
Top Corporate Fixed Deposits in India
Listed below are the top corporate fixed deposits in India.
- Ansal housing and construction
- Ind Swift Ltd
- Surya Roshni Ltd
- Jindal stainless Ltd
- Shri Ram
Things to Consider Before Investment
Some of the important points that you must consider before investing in a FD or a corporate deposit are mentioned below:
- Select the right option - It is important to choose a scheme that best suits your requirements.
- Compare - It is important that you compare different FD and corporate deposit schemes before investing in one.
- Evaluate your needs - It is vital that you evaluate your needs and priorities them before investing in a scheme.
FAQs on Corporate FD vs Bank FD
- Can one avail loans against bank fixed deposits?
Yes, one can avail loans against bank fixed deposits with no hassles.
- Is the rate of interest offered for bank fixed deposits and corporate fixed deposits the same?
No. The rate of interest offered on corporate fixed deposits is much higher.
- Which is riskier?
Corporate fixed deposits are riskier when compared to bank fixed deposits.
- Do all corporate companies offer fixed deposits?
No, not every corporate company offers fixed deposits.
- Are corporate fixed deposits safe?
Given that the investor chooses the right company to invest in, it is safe.
- Is TDS deducted on the interest from Corporate fixed deposits?
TDS is deducted on the interest if the interest on the deposit exceeds Rs.5,000 in a year.
- Can NRIs invest in corporate fixed deposits?
Some corporate companies allow NRIs to invest in fixed deposits.
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