A Guide to Corporate Fixed Deposits: Benefits, Best Practices, and More

The moment we hear the term Fixed Deposit (FD), our mind automatically registers it as a safe investment option that offers guaranteed returns, right?

But what are corporate fixed deposits? Are they different from regular FDs? If so, what are the factors that distinguish it from regular FDs? And what are the benefits that it offers over regular FDs?

In this blog, we have jotted down every single one of those answers to help you understand the concept. So, make sure to stick till the end, and learn the details before you start to invest your money!

What are Corporate Fixed Deposits?

Corporate FDs are very similar to the FDs that banks offer us. However, two main factors separate a corporate FD from a regular one-

• Corporate fixed deposits are offered by Non-Banking Financial Companies (NBFCs) or major financial institutions (except banks).
• Usually, corporate FDs offer a higher return than regular ones across various tenures. For instance, if banks offer, say 5% return on FDs, corporate FDs might just offer 8%.

Now that you’re aware of the differences, let’s understand the concept of corporate FDs in detail.

In case of a corporate fixed deposit, you’ll have to deposit a lump sum fund with the respective financial institution for a specific tenure. This tenure varies from 1 year to 5 years, depending on the offerings of the product assured by the financial institution.

Now, here’s the catch. Usually, fixed deposits offered by Public Sector Banks are insured by the Indian Government. However, that’s not the case when it comes to corporate fixed deposits! Apart from that, you get two separate interest payout options in this case-

• Cumulative interest: You will receive a compounded interest that will be paid to you when your FD matures.
• Non-cumulative interest: You will receive interest at consistent intervals, such as on a monthly, quarterly, semi-annually, or annual basis. It depends on how you choose to receive the interests.

Then again, remember that fixed deposits offered by corporates are not insured by the Government of India. So, it is best to double-check and re-evaluate the concerned financial institution’s credit ratings, overall financial health, recovery history, etc., before investing.

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The Benefits of Choosing Corporate FD

Many of you might think that corporate FDs aren’t as secure as regular FDF.Ds. However, there are several benefits of investing in a corporate FD, like-

• Better interest rates

Rather than bank FDs, corporate fixed deposit interest rates are much higher. So, if you were worried about the higher risk profile of this investment option, the higher return balances that out!

• Flexible tenure options

Banks usually have limited tenure options when it comes to regular fixed deposits. But, with corporate FDs, you get to enjoy flexible tenure options that vary from 1 year to 5 years. This enables you to plan your finances in a better way.

• Flexible interest payment options

Another thing about banks is that they only offer a cumulative interest payout option on FDs. But that is not the case with corporate deposit schemes! Here, you will get to choose whether you want a cumulative interest payout or a non-cumulative interest payout option.

• Easy and fast processing

Corporate FDs have one more advantage- you can easily open one through a financial institution’s online portal! The entire process of application has become digital nowadays, and it hardly takes a few minutes for the whole process to complete. Besides that, the matured amount gets credited faster.

• Premature selling

Lastly, you can also opt to prematurely sell your corporate FD just in case you require emergency funds. However, premature selling is subject to some specific terms and conditions. So, make sure to check those out before investing.

So, these are some of the many benefits of corporate fixed deposits that you can enjoy over regular FDs. Also, if you want to build a passive income other than corporate FDs, here are some best-performing dividend stocks of 2025 that can help you out.

What are the Best Practices for Choosing Corporate FDs?

Fixed deposits offered by banks are low-risk investment options. So, they may churn out smaller returns, but are considered to be one of the safest choices. On the other hand, corporate FDs have certain risks associated with them, which you need to consider. So, here are some best practices that you need to implement to make sure that you are opting for the most suitable option-

• Check the credit rating of the institution

The credit ratings of a financial institution reflect its overall financial stability. Organizations like CRISIL or ICRA assign these credit ratings to financial institutions. The rule of thumb is to opt for higher ratings like AAA or AA. This means your investments are safe.

• Check for the financial strength and creditworthiness of the institution

Another very important thing is to check the financial strength and creditworthiness of the institution under which you are opening your corporate fixed deposit.

List of Corporate Fixed Deposits You Can Opt for in 2025

Wrapping Up

No wonder bank fixed deposits are safe investment options. But they also come with lower returns, which might not be enough for the new-age investor. Corporate fixed deposits, on the other hand, are guaranteed income instruments that offer seamless benefits along with higher returns and unique payout options. So, make sure to determine what kind of option you are looking for, and don’t forget to consult a professional before finalizing your investments.

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F.A.Qs

Is it safe to invest in corporate fixed deposits?

Yes, it is perfectly safe to invest in corporate fixed deposits, provided you have researched the overall financial health of the concerned institution and credit ratings thoroughly.

What are the new rules for FD in 2025?

The new rule for FD in 2025 is the TDS deduction. According to the new rule, no TDS will be deducted if your annual interest for the FD exceeds ₹50,000.

Is fixed deposit 100% safe?

A fixed deposit is not 100% safe. However, bank FDF.Ds are considered one of the safest investment options as they are protected with government-backed insurance.

Which company gives the highest FD return?

It entirely depends on the type of institution, the tenure of your deposit, the amount you invested, and the mode of interest payout that you chose.

How to get investment in pvt ltd company?

The best way to invest in a pvt ltd company is through private agreements via sources like Venture Capitalists, and/ or Angel Investors.

Are FDs better than stocks?

Yes and no! Yes, because FDs are devoid of market volatility, and will offer you the return that was promised. And no, because the rate of return is much lower when compared to stocks!

Amilia Brown

Amilia Brown is a seasoned business writer & strategist who simplifies complex business concepts and turn them into engaging narratives. As a trusted business writer, she delivers actionable insights with precision.