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Tata Capital > Blog > Corporate Fixed Deposit Vs. Fixed Deposit – Which is Better?

Corporate Fixed Deposit Vs. Fixed Deposit – Which is Better?

Corporate Fixed Deposit Vs. Fixed Deposit – Which is Better?

If you were told that banks are the only institutions that offer fixed deposits, know that it’s not true. One of India's most popular investment instruments, the Fixed Deposit (FD), is also offered by Non-Banking Financial Corporations (NBFCs) and other companies. Collectively, these are known as Corporate Fixed Deposits or company FDs.

Much like bank fixed deposits, company FDs are low risk instruments that provide guaranteed returns, and you can open one or more at different tenures.

Despite several similarities between the two, depositors are often confused about choosing between a company FD or a bank FD.

Know that no one type of FD is better than the other. Your choice simply depends on various factors like rate of returns, risk exposure, tenure availability, etc. Therefore, several depositors diversify their funds in both FD types.

Corporate FD vs bank FD: features and differences

Allow us to draw an unbiased comparison between these two types of fixed deposits so that you can plan your FD investments better.

ParameterCompany FDBank FD
Offering authorityThese fixed deposits are extended by Non-Banking Financial Institutions (NBFCs) and companies.Only public or private sector banks issue this type of fixed deposit.
Interest ratesFinancial experts observe that typically, a company fixed deposit features higher interest rates.Bank fixed deposits also offer a low to moderate interest rate, which is usually not higher than a company FD.
RiskCompany FDs are rated by rating agencies. And the returns are commensurate to the rating of that particular Fixed Deposit.Bank FDs carry a comparatively lower risk owing to DICG scheme..   B

Additional Read: Mutual Funds VS Fixed Deposit : Which One Should You Choose?

How to choose?

Consider the following factors before choosing any or both types of fixed deposits:

  • Begin by thoroughly researching the market. Don’t just look at interest rates, but also The rating of the Fixed Deposit scheme
  • Investments in Fixed Deposit schemes should be part of the financial planning and risk and return should be in line with the financial risk profile of the customer.

Additional Read: What are the Pros and Cons of Investing in a Fixed Deposit?

The bottom line

Are you looking for a High rated & high yield company fixed deposit? Well, then find one on Tata Capital Moneyfy. Through our web portal, you can quickly sort through a number of investment instruments that range from mutual funds to SIPs to fixed deposits and many others. You can also book your company FD by using the Moneyfy app.

So, multiply your wealth by investing in the right financial instruments by visiting our website..

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