Investing for Business Growth: Exploring Corporate Fixed Deposit Interest Rates

Corporate Fixed Deposits (FDs) or Company FDs are term deposits designed for businesses to park their money for a specific period and earn interest on it. However, they are different from Regular FDs in terms of purpose and features.

In this blog, we have explored a few options that businesses can consider to achieve best Corporate FD interest rates. However, let's first understand Corporate FDs and how they are different from Bank FDs.

Credit Rating

Corporate FDs come with a credit rating accredited by recognised agencies such as CRISIL, ICRA, and CARE. These ratings indicate the credibility of the financial institution and help depositors assess the risk associated with their investments.

Interest Payment Options

NBFCs and HFCs provide various interest payout options, including monthly, quarterly, half-yearly, and annual payouts. Alternatively, depositors can choose the cumulative FD option, where the interest is reinvested to harness the power of compounding.

Premature Withdrawal

Most financial institutions offer premature withdrawal facilities with certain terms and conditions. However, it is important to note that penalties may apply for early withdrawals.

1. Credit Rating

Before investing, check the credit rating assigned by rating agencies like CRISIL, CARE, or ICRA. The higher the rating, the lower the chances of default in interest and principal repayments. Doing this activity is all the more important since Corporate Fixed Deposits are not insured by DICGC. Click here

2. Interest Rates

Compare Corporate FD interest rates offered by different issuers before making a decision. Some NBFCs provide higher interest rates for the same tenure as others. Research thoroughly to maximise your returns.

3. Lock-in Period and Withdrawal Charges

Understand if there is a lock-in period during which premature withdrawals are not allowed or if there are any charges associated with early withdrawal.

4. Reputation and Track Record

It is always recommended to invest in Corporate FDs offered by well-established institutions with a proven track record of timely interest payments and principal repayments.

Investing for business growth requires careful consideration. Corporate FDs can be a viable option for businesses seeking stable returns for a specific tenure. However, consider credit ratings, service charges, flexibility in terms of interest payouts, etc., before booking a Corporate Fixed Deposit.

Looking to grow your savings? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.

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