Kolkata: As the equity markets plummet due to the impact of the energy crisis thrust on the world by the West Asia conflict, debt instruments are gradually attracting attention of a large number of investors. Corporate fixed deposits (FD) are one of the fixed-return instruments that have been popular with a large number of investors. Let’s have a look at the rates some of the better corporates are now offering.
A scrutiny of the FD market reveals that NBFCs and HFCs (housing finance companies) offer relatively higher interest rates on corporate fixed deposits compared to the major banks, both public sector ones and private sector ones. “One of the key advantages is the higher interest rates that corporate FDs give compared to traditional bank FDs, often 1–2% more, depending on the company’s credit rating and the duration of the deposit,” Adhil Shetty, CEO of BankBazaar.com has been quoted as saying. Let’s have a look at a few prominent FDs.
Shriram Finance
Rate of interest
1-year: 7%
3-year: 7.60%
5-year: 7.60%
Rating: AA+ (watch positive), AAA (CARE)
Senior citizens to get 0.50% more for each tenure
Mahindra Finance
Rate of interest
1-year: 6.60%
3-year: 7%
5-year: 7%
Rating: AAA
Senior citizens to get 0.20% to 0.35% more
PNB Housing Finance
Rate of interest
1-year: 6.60%
3-year: 6.90%
5-year: 6.90%
Rating: AA+
Senior citizens to get 0.25% more for each tenure
LIC Housing Finance
Rate of interest
1-year: 6.70%
3-year: 6.85%
5-year: 6.90%
Rating: AAA
Senior citizens to get 0.25% more for each tenure
Sundaram Home Finance
Rate of interest
1-year: 6.70%
3-year: 7%
5-year: 7.15%
Rating: AAA
Senior citizens to get 0.35% to 0.50% more for each tenure
Bajaj Finance
Rate of interest
1-year: 6.60%
3-year: 6.95%
5-year: 6.95%
Rating: AAA
Senior citizens to get 0.35% more for each tenure
ICICI Home Finance
Rate of interest
1-year: 6.75%
3-year: 6.90%
5-year: 7%
Rating: AAA
Senior citizens to get 0.35% more on each tenure
Check the ratings assigned
Ratings which are assigned to these instruments by credit rating agencies are an useful guide for investors. These ratings signal a lot of critical variables for the financial condition of the company issuing the debt paper. If the rating is stronger, it indicates dependable payout of interest and principal and a lower chance of default. Ratings such as CRISIL, ICRA and CARE assign these ratings. The ratings range from AAA, which indicate highest safety, to D which indicates default.
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