What is a Company Fixed Deposit – Is it a Safe Investment?

  • Deposit
  • 28 Days ago

Written by - Shriram

Are you here to find out if a company fixed deposit is safe for investment?  
With the evolution of leading NBFCs (Non-Banking Financial Companies) like Shriram, a company/corporate fixed deposit is safe and profitable.

So, let us assure you that with this article, you will get clarity on a company fixed deposit and why it is considered safe for investment.

A company fixed deposit in India is one of the most beneficial FD schemes to invest in right now. It helps investors to diversify their funds and build a profitable and safe investment portfolio. While there are many market-dependant investment options, a company fixed deposit offers returns that closely match a few market-dependant investment options like stocks, Mutual Funds (MFs) and Systematic Investment Plans (SIPs).

What is a Company/Corporate Fixed Deposit?

A company fixed deposit is a type of fixed deposit offered by NBFCs, manufacturing firms and housing finance ventures. A company FD is one of the most reliable investment options that helps you to grow your wealth seamlessly. A company fixed deposit is also known as a corporate fixed deposit, regulated by Section 58 A of the Companies Act, 2013.

A corporate/company FD offers up to 3% higher interest rate than most banks. Likewise, Shriram offers an attractive interest rate of up to 8.75% per annum, including a 0.50% additional interest rate for senior citizens.

Considering the current market conditions and uncertain returns, a corporate fixed deposit helps you secure your future and set financial goals with fixed and assured returns. At Shriram, your fixed deposit is safe as it is rated “IND AA+/Stable” by India Ratings & Research and “[ICRA]AA+ (Stable)” by ICRA, which indicates high credit quality and a higher degree of safety.

Is it Safe to Invest in a Company/Corporate Fixed Deposit?

We all know that money does not grow on trees. But with a good savings plan, you can help the money grow. A corporate fixed deposit is an investment plan that helps you multiply your wealth and double your hard-earned savings.

Gone are those days when you depended only on banks for safety and reliability. A corporate fixed deposit is similar to a bank fixed deposit with higher returns at low risk. Besides, NBFCs that offer company fixed deposit schemes are rated for safety by Credit Rating Information Services of India Limited (CRISIL), Investment Information and Credit Rating Agency of India Limited (ICRA) and India Ratings & Research. So a corporate FD has a high degree of safety.

Shriram is Safe for a Company Fixed Deposit

Shriram is one of the leading NBFCs in India that helps customers across all tiers to build their lives and accomplish their dreams with loans and investments like a fixed deposit. It supports investors to save a small amount of money starting from Rs. 5000 in a corporate fixed deposit and get assured returns at maturity.

Shriram is popular among 2.12 million customers for its high interest rate. Currently, Shriram offers an attractive corporate fixed deposit interest rate of up to 8.75% per annum, including 0.50% for senior citizens.

CRISIL and ICRA Safety Ratings on a Company/Corporate Fixed Deposit

NBFCs are commonly rated for safety by credit rating agencies like CRISIL, ICRA and India Ratings & Research. Here is a table that indicates the level of safety for each rating.
 
SR. NO. AGENCY RATING REMARK
1 CRISIL AAA Highest Safety
2 CRISIL AA Highest Safety – Low Credit Risk
3 CRISIL A Moderate Safety
4 CRISIL BBB Moderate Credit Risk
5 CRISIL BB Moderate Risk – Inadequate Safety
6 CRISIL B High Risk of Default
7 CRISIL C Very High Risk of Default
8 CRISIL D Indicated Possibility of Default in Future
 
SR. NO. AGENCY RATING REMARK
1 [ICRA]AAA Highest Safety
2 [ICRA]AA Highest Safety – Low Credit Risk
3 [ICRA]A Adequate Safety - Low Credit Risk
4 [ICRA]BBB Moderate Safety and Moderate Credit Risk
5 [ICRA]BB Moderate Risk
6 [ICRA]B High Risk of Default
7 [ICRA]C Very High Risk of Default
8 [ICRA]D Expected to be in Default Soon

Note: The modifier + (plus) adds more credibility to the rating.  Shriram is rated “[ICRA]AA+ (Stable)” by ICRA, meaning the safety rating is one notch higher than [ICRA]AA.

Top 3 Benefits of a Company Fixed Deposit

Below are three benefits that substantiate why you should invest in a company fixed deposit.
  1. Higher FD Interest Rate – A corporate fixed deposit scheme offers a higher interest rate than a standard bank fixed deposit scheme. You can use an online FD calculator to find the exact interest you would earn in a corporate fixed deposit.
  2. High Safety-Rated FD Schemes – Nowadays, NBFCs/corporates offer high safety-rated FD schemes to promote FD investment among traditional and new-age investors.
  3. Loan Against an FD – You can get a loan against an FD if you hold a corporate fixed deposit account with any NBFC/company.

Start Your Investment Journey with a Company Fixed Deposit

Amidst many market-dependant investment options like Mutual Funds, SIPs and Stocks, a corporate fixed deposit offers greater security to your principal amount and assures higher returns. Shriram offers attractive interest rates of up to 8.75% taking the corporate fixed deposit to a whole new level to help investors achieve their dreams by saving according to their convenience. So make the right choice now and book an FD with Shriram.

FAQ

Which is the safest fixed deposit scheme?

One of the safest fixed deposit schemes in India is Shriram Fixed Deposit. All the fixed deposit schemes from Shriram are rated “IND AA+/Stable” by India Ratings & Research and “[ICRA]AA+ (Stable)” by ICRA, and hence you can rely on and book a fixed deposit safely.

Is fixed deposit risk-free?

Yes, a fixed deposit is risk-free. As banks and NBFCs have levelled up their safety, an FD is safe and free from risks. Also, as a fixed deposit is not market-dependent, your interest rate remains stable and does not fluctuate based on market conditions.

Which type of FD is the best?

A corporate fixed deposit from Shriram is the best type of FD. Especially when you book a corporate FD with a company like Shriram, you get greater security to your principal amount and assured higher returns at an interest rate of up to 8.75%.

Can you lose money in FD?

No, you will not lose money in an FD. As a bank fixed deposit is managed by RBI, and a corporate fixed deposit is rated for safety by CRISIL and ICRA, the probability of losing money in an FD is very less.

Key Highlight

  • With the evolution of (Non-Banking Financial Companies) NBFCs like Shriram, a company/corporate FD is, safe and profitable.
  • A company fixed deposit in India is one of the most beneficial FD investment schemes.
  • While there are many market-dependant investment options, a company fixed deposit offers returns that closely match a few market-dependant investment options like stocks, Mutual Funds (MFs) and Systematic Investment Plans (SIPs).
  • A corporate fixed deposit from Shriram helps investors to diversify their funds and build a profitable and safe investment portfolio.