Acompany fixed deposit is a term deposit which is held over a fixed period at fixed rates of interest. Such FDs are offered by financial and non-banking financial companies. The maturities of various company fixed deposits can range from a few months to a few years. In this rising interest rates scenario, leading non-banking financial companies and housing finance companies have raised interest rates on their FDs.
The interest rates of corporate fixed deposits are higher compared to what public sector banks and major private sector banks offer. However, unlike bank FDs, Deposit Insurance and Credit Guarantee Corporation (DICGC) does not cover corporate FDs with deposit insurance of Rs 5 lakh.
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The depositors should carefully study the ratings assigned by agencies like CRISIL, ICRA and CARE while selecting the corporate FDs. They assigned these ratings based on the agencies’ assessment of the financial health of the NBFC or the HFC issuing corporate FDs. Higher-rated corporate FDs carry lower chances of defaults in interest and principal repayments. Here are some corporate FDs that offer the best interest rates.
Shriram Transport Finance Co Ltd gives an interest rate of 7.76 percent p.a. (at monthly rests) on cumulative FDs opened for a three-year tenure. Thus, a cumulative FD of Rs 10,000 opened for a three-year tenure will amount to Rs 12,513 on the maturity date.
PNB Housing Finance Ltd. offers an interest rate of 7.55 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for a 3-year tenure will amount to Rs 12,440 on the maturity date. Credit rating agency CRISIL has assigned the credit rating of FAA+/Negative to this HFC. As per this rating agency, FAA indicates strong chances of timely interest and principal repayment by the HFC.
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Bajaj Finance Ltd. offers an interest rate of 7.40 percent p.a. on cumulative FDs opened for a three-year tenure. The minimum deposit amount set by the NBFC is Rs 15,000. Thus, a cumulative FD of Rs 15,000 opened for a three-year tenure will amount to Rs 18,582 on the maturity date. CRISIL has assigned a credit rating of AAA/Stable to this NBFC.
LIC Housing Finance Ltd offers an interest rate of 6.95 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for a 3-year tenure will amount to Rs 12,233 on the maturity date.
HDFC Ltd. offers an interest rate of 6.85 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for a 3-year tenure will amount to Rs 12,199 on the maturity date.
Sundaram Home Finance Ltd. offers an interest rate of 6.65 percent p.a. (compounded quarterly) on cumulative FDs opened for 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,131 on maturity date.
