Corporate fixed deposits
Higher rates than bank deposits — and the credit risk that comes with them, stated plainly.
Summary
Corporate fixed deposits are deposits raised by companies and NBFCs, paying between 8.15% and 9.35% annually in this illustrative dataset. Unlike bank deposits they are unsecured and not covered by DICGC insurance, so the higher rate compensates for issuer credit risk.
Corporate FDs are not insured deposits
These are unsecured obligations of the issuing company. DICGC insurance, which covers bank deposits up to ₹5 lakh per depositor per bank, does not apply. In the event of issuer default, recovery may be partial, delayed, or absent.
| Issuer | Rating | Rate | Senior citizen | Tenure | Minimum |
|---|---|---|---|---|---|
| Sample NBFC AQuarterly compounding | AAA | 8.15% | +0.35% | 3 years | ₹20,000 |
| Sample Housing Finance BQuarterly compounding | AA+ | 8.60% | +0.40% | 5 years | ₹25,000 |
| Sample Manufacturing CQuarterly compounding | AA | 9.00% | +0.25% | 2 years | ₹10,000 |
| Sample Finance DQuarterly compounding | AA- | 9.35% | +0.50% | 4 years | ₹25,000 |
Credit ratings are opinions of the named rating agency on the issuer's ability to meet obligations. They are not recommendations and may be revised or withdrawn. Market figures shown in this build are illustrative sample data for demonstration purposes and are not live exchange quotes.
Frequently asked questions
Are corporate fixed deposits safe?
Corporate fixed deposits are unsecured obligations of the issuing company and are not covered by DICGC deposit insurance, unlike bank deposits up to ₹5 lakh. Repayment depends entirely on the issuer's financial health. A credit rating is the rating agency's opinion of that ability and can be downgraded.
Why do corporate FDs offer higher interest than bank FDs?
The higher rate is compensation for higher credit risk and the absence of deposit insurance. Companies raising deposits must price above bank rates to attract funds. As a rule, a materially higher offered rate signals materially higher risk, not a better deal.
Is corporate FD interest taxable in India?
Interest on corporate fixed deposits is generally taxable as income from other sources at your applicable slab rate, and TDS may be deducted above prescribed thresholds. Tax treatment depends on your circumstances and current law — consult a qualified tax professional.