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A Fixed Deposit is often considered as the most effective saving instrument. It comes with a predefined rate of interest and guaranteed returns. Also, it can be easily opened online and is offered by all banks. Keeping these features in mind, have you considered a corporate FD over Traditional FDs? They are equally lucrative and offer higher returns in comparison to Traditional FDs.
While standard FDs are offered by banks, Corporate FDs or Company Fixed Deposits are Fixed Deposit Schemes offered by companies and Non-Banking Financial Corporations. Non-Convertible Debentures are also a type of corporate FD.
Companies offer Fixed Deposit Schemes to the public as a practice of raising funds for business expansion or clearing debt. Similar to a bank FD, you are required to invest your money into a corporate house for a fixed tenure, at the end of which, your sum would be returned along with the interest amount.
The benefits and features of corporate FDs are:
The above benefits and features are also the reason why people select Corporate FDs over Traditional FDs.
A few corporate FDs for 2019 are:
|Name of Company||CRISIL/ICRA Rating||Rate of Interest (per annum)|
|ICICI Home Finance Ltd||CRISIL FAAA||9.33%|
|DHFL||CRISIL* A 1+||9.00%|
|Mahindra Finance Ltd||CRISIL FAAA||9.00%|
|Shriram Transport Finance Ltd||CRISIL FAAA||8.88%|
|Shriram City Union Finance Ltd||ICRA MAA+||8.88%|
|Bajaj Finserv Ltd||CRISIL FAAA||8.75%|
|PNB Housing Finance Ltd||CRISIL FAAA||8.45%|
|LIC Housing Finance Ltd||CRISIL FAAA||8.35%|
|HDFC LTD||ICRA MAAA||7.98%|
The eligibility criteria to hold a corporate fixed deposit are:
Pros and Cons of Bank FD and Corporate FD account?
The pros and cons of Bank and Corporate FD account are:
|Benefits||Corporate FD||Bank FD|
|Rate of Interest||High||Low|
|Interest payment flexibility||Yes||Yes|