Company (Corporate) Fixed Deposits 2023
What is a company fixed deposit?
Corporate fixed deposit (corporate FD) or NBFC fixed deposit are term deposit kept for a set amount of time at a set interest rate. Financial institutions, both banking and Non-Banking Financial Companies (NBFCs), provide corporate fixed deposits. Many NBFC fixed deposits have maturities that can range from a few months to a few years.
To meet your investment needs, choose from a variety of company fixed deposit choices with varied tenures, interest rates, and institutions. You can get profitable returns and gain from significantly reduced volatility with high rated company fixed deposit.
Why you should invest in a company fixed deposit?
A company term deposit, often known as a company FD or corporate FD, is a type of FD provided by corporations such as finance companies, housing finance companies, and other types of NBFCs. For many firms/ companies, company fixed deposits are an excellent means to raise capital from the public. A variety of rating organisations, like as ICRA, CARE, CRISIL, and others, frequently grade these term deposits for their credibility.
Company fixed deposits are comparatively better than bank-fixed deposits as they offer higher interest rates. The FD rates change basis several factors. One of them is the repo rate change made by the Reserve Bank of India (RBI).
While investing in a corporate FD, you may want to choose issuers offering high-interest rates. However, it is equally important to check for the credibility of the financier, failure of which may lead to a risk of delays or defaults. Hence, it is best to choose a safe company fixed deposit accredited with high stability ratings by credit rating agencies like CRISIL and ICRA.
Why you should invest in a company fixed deposit
Company fixed deposits are comparatively better than bank-fixed deposits as they offer higher interest rates. Bank FD rates change basis several factors, which are influenced by the interest rate movement decided by the Reserve Bank of India (RBI).
When investing in a corporate FD, you may want to choose issuers offering high-interest rates. However, it is equally important to check for the credibility of the financier, failure of which may lead to a risk of delays or defaults. Hence, it is best to choose a safe company fixed deposit accredited with high stability ratings by credit rating agencies like CRISIL and ICRA.
Top corporate FD interest rates
Company name |
1-year tenure |
3-year tenure |
5-year tenure |
Bajaj Finance Limited |
7.65% p.a. |
8.35% p.a. |
8.30% p.a. |
Other NBFCs |
5.55% p.a. |
6.20% p.a. |
6.90% p.a. |
Note: The above FD rates are w.e.f 14 November, 2024.
You can calculate the returns on your investment with the help of FD interest rates calculator.
What to keep in mind when choosing a company FD?
- Safety ratings: Some company fixed deposits are officially certified by credit rating agencies such as CRISIL and ICRA. This rating is done on a 14-point rating system, which determines the assumed risk levels. These will assure you of the company’s fixed deposit stability from time to time. The higher the rating, the safer your investment. You can also compare the track record of company fixed deposit rates and determine those offering higher interest rates. For instance, Bajaj Finance Fixed Deposit has ratings of CRISIL AAA/ STABLE and [ICRA]AAA(Stable), which is the highest in the industry.
- Past repayment history: A company with timely interest payments and no default repayment of fixed deposits is ideal. For example, Bajaj Finance is one of the only NBFCs to have ‘0 unclaimed deposits’. This indicates the highest safety of your deposit and the assurance of timely payments and default-free experience. Additionally, the trust of more than 3 lakh happy FD customers and a deposit book of over Rs. 25,000 crore is a testament that Bajaj Finance is one of the most reliable FD issuers.
Benefits of investing in a company fixed deposit
- Flexible periodic interest payout options: Companies like Bajaj Finance offer periodic payment options like monthly, quarterly and annually. These options can help you achieve a fixed income for your planned expenses. You also have the option to choose interest payout at maturity, which will help you create a sizeable corpus.
- No effect of market fluctuations: FD rates are pre-determined and free from market fluctuations, and with a company fixed deposit, you can also earn higher interest.
- Liquidity: A loan against a fixed deposit is readily available for up to 75% of the invested amount. Another way to achieve liquidity is the option of premature withdrawal with a minimal penalty.
- Additional rate benefits: Company FDs offer benefits such as revision of interest rate based on your investment tenure.
Bajaj Finance FD offers interest rates up to 8.50% p.a. for tenure of 44 months. You can also calculate your fixed deposit portfolio returns by using the online FD calculator. You can adjust the tenure and the principal amount and see the maturity amount you will receive. It is a simple and valuable tool for portfolio planning.
Frequently asked questions
A corporate fixed deposit (corporate FD) is a term deposit kept for a set period of time at a set rate of interest. Financial and non-banking financial institutions offer company fixed deposits (NBFCs).
Corporate fixed deposits outperform bank-fixed deposits because they pay a much greater interest rate. The difference in interest rates between conventional bank FDs and corporate fixed deposits is typically between 1% and 3%. In the long run, this seemingly minor variation might have a significant impact on your corpus. Furthermore, company fixed deposits typically have fewer lock-in periods and are more flexible in terms of how interest is paid.
A corporate fixed deposit can be utilised to obtain a loan when funds are needed in an emergency. The amount sanctioned can differ from one financial institution to the next. It can usually go up to 75% of the fixed deposit amount.
To invest in a company’s FD, visit the firms or NBFC's website, complete KYC criteria by submitting the necessary documents. You can choose the investment amount, the tenure, and payout option and start your corporate FD. The Bajaj Finance FD Calculator will give you more insight into the maturity amount you will receive on completion of tenure.
