Understanding Corporate Fixed Deposits: Benefits and Risks
A corporate fixed deposit (FD) is a savings tool provided by Non-Banking Financial Companies (NBFCs) and other corporations. Similar to traditional FDs issued by banks, corporate FDs let investors deposit a sum of money for a specific tenure. In return, investors may receive a fixed interest rate over the chosen tenure. Corporate FDs are considered low-risk investments but carry more risk compared to FDs issued by banks. Explores the key benefits and risks of corporate FDs. What are Corporate Fixed Deposits? Corporate FDs work much like regular FDs. Investors deposit a lump sum for a set tenure, which could range from a few months to several years. The interest rates on corporate FDs are generally higher than those offered by bank-issued FDs. This higher rate could be due to the additional risk associated with investing in companies rather than banks. At the end of the tenure, investors receive the principal amount along with the accumulated interest. How to Calculate Interest on Fixed...
