How to Open a Corporate Fixed Deposit

Corporate Fixed Deposit

Looking for higher returns than what banks offer on fixed deposits? Corporate fixed deposits (Corporate FDs) might be the answer. Offered by Non-Banking Financial Companies (NBFCs) and corporations, these FDs typically offer 1-2% higher interest rates than bank FDs. But they also come with additional risks. This guide explains how to open a corporate FD, what to watch out for, and how to make smart choices.

What Is a Corporate Fixed Deposit?

A corporate FD is a fixed deposit offered by a company (usually an NBFC or a large corporation) directly to the public. Unlike bank FDs, corporate FDs are not insured by DICGC. The returns are higher because the risk is slightly higher. Companies use these deposits to raise funds for their business operations and lending activities.

Popular Corporate FD Providers

Bajaj Finance: One of the most popular corporate FD providers with CRISIL AAA rating.
Shriram Finance: Offers competitive rates, particularly for longer tenures.
Mahindra Finance: Backed by the Mahindra Group with a strong credit rating.
HDFC Ltd: A trusted name (now merged with HDFC Bank, but previously offered corporate FDs).
PNB Housing Finance: Offers attractive rates for various tenures.

Corporate FD Interest Rates (2025)

Corporate FD rates typically range from 7.5% to 8.5% for regular customers and 8% to 9% for senior citizens, depending on the company and tenure. These rates are significantly higher than the 6-7.5% offered by most banks.

How to Open a Corporate FD Online

Step 1: Choose a Company

Select a corporate FD provider based on:

Credit Rating: Only invest in FDs rated AAA, AA+, or AA by agencies like CRISIL, ICRA, or CARE. Avoid lower-rated companies.
Interest Rate: Compare rates across companies for your desired tenure.
Company Track Record: Stick to well-known companies with a long history of honouring deposits.

Step 2: Visit the Company’s Website

Go to the company’s official website and navigate to the “Fixed Deposits” section. Most large NBFCs have a seamless online application process.

Step 3: Fill in the Application Form

Enter your personal details:

Full name, date of birth, and contact information
PAN number (mandatory)
Aadhaar number for KYC
Bank account details for interest credits and maturity payout
Nominee details

Step 4: Complete KYC

If you are a new customer, you will need to complete KYC verification. This can usually be done online through video KYC or by uploading documents (PAN, Aadhaar, address proof).

Step 5: Select Amount and Tenure

Choose the deposit amount and tenure. Minimum investments typically start at Rs 15,000 to Rs 25,000. Select between cumulative (reinvest interest) and non-cumulative (periodic interest payout) options.

Step 6: Make the Payment

Pay using net banking, UPI, or NEFT/RTGS. The FD is created once the payment is received and verified.

Step 7: Receive the FD Certificate

You will receive a digital FD certificate via email and in your online account with the company. This certificate contains all details — FD number, amount, rate, tenure, and maturity date.

Risks of Corporate FDs

No DICGC Insurance: Unlike bank FDs, corporate FDs are not insured. If the company defaults, you could lose your money.
Credit Risk: The company may face financial difficulties, especially during economic downturns.
Liquidity Risk: Premature withdrawal from corporate FDs can be more restrictive than bank FDs.
Regulatory Risk: NBFCs are regulated by the RBI, but the regulatory framework is less stringent than for banks.

How to Mitigate Risks

Check Credit Ratings Regularly: A downgrade in credit rating is a red flag. Monitor the company’s rating at least annually.
Diversify: Do not put all your money in one company’s FD. Spread across multiple issuers.
Limit Exposure: Keep corporate FDs to a reasonable portion (20-30%) of your total FD portfolio. The rest should be in bank or post office FDs.
Stick to AAA-Rated Companies: The extra 0.5% from a lower-rated company is not worth the risk.
Read the Fine Print: Understand the premature withdrawal terms, penalty, and minimum lock-in period.

Corporate FD vs Bank FD

Returns: Corporate FDs offer 1-2% higher returns.
Safety: Bank FDs are safer due to DICGC insurance and RBI regulation.
Convenience: Bank FDs are easier to manage, especially online.
Tax Treatment: Both are taxed the same way — interest is added to your income and taxed at your slab rate.

Tax Implications

Interest from corporate FDs is taxable as “Income from Other Sources.”
TDS is deducted at 10% if interest exceeds Rs 5,000 per year (note: this threshold is lower than bank FDs).
Submit Form 15G/15H to avoid TDS if eligible.

Track Your Corporate FDs with Bachatt

Managing corporate FDs alongside bank FDs requires careful tracking of different maturity dates, interest rates, and credit ratings. Bachatt consolidates all your fixed deposits — bank and corporate — in one dashboard. Stay informed, stay safe, and make your money work harder. Download Bachatt today.