A bank fixed deposit is held for a predetermined time and returns.
These fixed deposits also have a set duration and rate of return.
Bank FDs are insured by DICGC for Rs 5 lakh per bank, while the safety of Corporate FDs depends on the company’s financial health and credibility.
Bank FD rates are influenced by economic conditions and central bank policies; Corporate FDs offer higher interest rates as per their funding needs.
Bank FDs offer moderate liquidity, often allowing premature withdrawal with a penalty; Corporate FDs may have longer lock-in, limiting access to funds.
Bank FD interest is taxed according to tax slab; Corporate FD interest is also taxable, but rates vary based on various factors.
Banks lack credit ratings and are deemed safe due to government backing. However, higher-rated corporate FDs are considered safe investments.
Corporate FDs typically come with longer lock-in periods compared to bank FDs.
Compiled by Himani Verma