What is Corporate FD?
There are many different types of FD options available out there. When I was exploring my FD investment options, I came across this and asked my friend what is corporate FD. He told me that a corporate FD means fixed deposit is offered by Housing Finance Companies or Non Banking Financial Corporations.
When I further explored corporate FDs, I learned that they offer comparatively higher interest rates.
They work more or less like a regular FD. I think the difference is the risk factor. Based on the CRISIL, ICRA and CARE rating, you will bear moderate to high risk. Better rating means lower risk of investment.
Other than that, you have similar tenure as a regular FD, i.e., between 7 days to 10 years.
In fact, withdrawal terms are also similar to regular FDs. You can also prematurely withdraw the FD amount by paying a penalty of 0.25% to 0.50% interest.