With the new COVID-19 Omicron variant posing a threat to India’s economic recovery, exploring options is critical to making the right investment and staying afloat from rising inflation. Despite the drop in interest rates on bank savings, there are still ways to offer you higher interest rates and help you earn good returns in an uncertain economy.
Corporate term deposits may be an option for investors to explore, as there are non-bank finance companies that offer lucrative interest rates.
The Reserve Bank of India has taken a series of steps over the past two years and has avoided any changes that could hamper demand and investor sentiment. At its last monetary policy review meeting, the RBI kept repo rates unchanged at 4%. In fact, the apex bank last revised its key rates on May 22, 2020 to revive demand by lowering interest rates to an all-time low.
Now is the time to make the most of this situation and as an investor you need to know the market on a daily basis. Currently, several public and private banks as well as housing finance companies offer interest rates between 5.75% and 7.48% per annum on term deposits of companies. That’s higher than what you usually get in FD and bank savings, according to Bankbazaar.
Corporate FDs or corporate FDs are a type of deposit like bank FDs. Top-rated corporate FDs offer the security of assured returns and flexibility in choosing the mandate. One of the most attractive features of these corporate FDs is the higher interest rate than bank FDs. The mandates of corporate FDs can range from 12 months to 120 months.
Investors should also remember to check the companies’ FD credit ratings and are advised to only invest in companies rated AAA, AA and AA + by agencies like Crisil, ICRA, CARE, etc.
Top-rated business FDs are not only considered safe, but they are also likely to offer you higher interest rates on your deposit. Also note that corporate FDs are fully taxable depending on the investor’s income bracket.
Here are the 10 best corporate FD rates and ratings that you can use to make your investment decision. You can weigh your options and choose the corporate FDs that give you the highest returns and the freedom to choose the mandate. Please note that the table below is not exhaustive and does not include companies that are not currently accepting new deposits.
Latest rates and valuations of the company FD
Data as of December 8, 2021. All issuers give an additional 0.25% interest rate to seniors except Shriram City Union and Shriram Transport which give 0.40%, while Sundaram Home Finance and Sundaram Finance give 0.50%. The data shows the highest interest rate for cumulative fixed deposit less than Rs 1 crore in the corresponding term range. Data taken from the respective company’s website.
Compiled by BankBazaar.com