As interest rates increase, numerous savers are looking for ways to get better value from their fixed deposits. While Bank Fixed Deposits (FDs) are still a go-to for risk-averse investors, Corporate FDs, also known as company deposits, offer an alternative that sometimes has better returns. But what’s the actual difference, and where can you get the maximum return possible?

We are comparing Bank FDs with Corporate FDs.

What is a Bank Fixed Deposit (FD)?

A Bank FD is fundamentally a deposit you make with a bank for a fixed duration and interest rate. These banks are under the supervision of the Reserve Bank of India (RBI), so they have to follow the strict banking rules. Most importantly, in India, deposits held with banks enjoy an insurance scheme offered by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a subsidary of RBI. This insurance provides cover for up to ₹5 lakh per depositor per bank which means your funds are safe even if the bank encounters financial problems.

What is a Corporate Fixed Deposit?

Corporate Fixed Deposits are received by non-banking financial companies or public limited companies. Companies use these deposits for business operational and capital activities. Unlike bank fixed deposits, Corporate Fixed Deposits do not have the protection of government deposit insurance DICGC.

Key Differences to Consider:

Which Offers More Return?

Corporate fixed deposits normally have higher interest rates than the normal bank fixed deposits. Corporate working capital finance with good credit ratings (AAA, AA) offers best returns on Corporate Fixed Deposits.

Which One Should You Choose?

Both the investment choices should align with your risk appetite and financial milestones:

Higher interest rates come with higher risks. The return will depend on safety offered and type of each deposit.

Read More: Like this, apply online as mcc.nic.in will be beginning NEET UG 2025 counselling