A company or corporate fixed deposit is issued by non-banking financial companies (NBFCs) and corporates to raise capital. These FDs are unsecured and typically offer higher interest rates than bank FDs. Investors should evaluate the issuer’s credit rating before investing.
| Feature | Company FD | Bank FD |
|---|---|---|
| Issuer | NBFCs, housing finance companies and corporates | Banks regulated by RBI |
| Security | Unsecured; no deposit insurance | Secured; covered up to ₹5 lakh by DICGC |
| Interest rate | Generally higher (often 7–9%+) | Moderate (usually 3–7%) |
| Risk | Higher due to credit risk of company | Lower due to regulatory oversight |
| Liquidity | Premature withdrawal may be restricted | Generally allowed with penalty |
Company FDs can provide higher returns but carry credit risk and lack deposit insurance. Assess the issuer’s credit rating, financials and regulatory compliance before investing. Diversify across issuers and avoid investing all your savings in a single corporate deposit.
