corporate FD
The direct impact of the total interest rate cut of 125 basis points made by the Reserve Bank of India (RBI) in the year 2025 is visible on the interest rates of fixed deposits. In the MPC meeting held on December 5, the central bank once again cut the repo rate by 25 basis points, after which banks and NBFCs further reduced their FD rates. This has affected the returns to traditional savers.
NBFCs are paying more interest than banks
Most public and private banks have now increased their fixed deposit rates between 6.5% to 7.5%. Many NBFCs have also cut their interest rates. Earlier, where investors could easily get returns of up to 8-9%, now due to reduction in rates, the pressure on their returns has increased. Despite this, there are some non-bank companies in the market which are still giving annual interest up to 8.85%, especially to senior citizens. Senior citizens are usually given additional interest ranging from 0.25% to 0.50%.
Talking about corporate FD rates, many companies are offering competitive interest. For example, Bajaj Finance is offering interest up to 7.30%, Sundaram Finance 7.50%, Manipal Housing Finance 8.50%, Shriram Finance 8.65% and Muthoot Capital 8.85%. Considering these rates, many investors are leaning towards corporate FDs.
Invest wisely
But experts say that with higher interest comes higher risk. Bank FDs are insured up to Rs 5 lakh per bank under DICGC, whereas there is no insurance cover on corporate FDs. Therefore, if the company gets into financial trouble, the investor’s money may get stuck. For this reason, it is advisable to invest only in companies with AAA or AA ratings from rating agencies like CRISIL, ICRA or CARE.
NBFCs are definitely monitored by RBI, but still the risk is not completely eliminated. Therefore, investors must check the balance sheet, track record and credit rating of the company. Experts believe that if an investor wants higher returns from the bank and can take some risk then corporate FD can be a right option. This is especially attractive for senior citizens. But for those seeking capital security, bank FD and government schemes are considered better options.