FDs have been a popular investment instrument for many reasons. Apart from bank FDs, a corporate FD can be beneficial as it typically offers higher interest rates. A corporate fixed deposit is where a certain amount of money is held for a certain period of time to provide you with interest-based returns. Corporates collect money from each individual which is utilized by the company for a particular period of time. In return, an interest is paid to the investor.
4 Reasons Why You Should Invest in a Corporate FD
Here are the 4 key reasons why you should invest in a corporate FD.
- Short-Term Investments
A key advantage of corporate FD is that they provide a shorter tenor compared to bank FDs. While a bank FD’s tenor may vary between weeks and months, a corporate FD cannot have a tenor for more than 5 years.
- Higher Interest Rates
The corporate FD rates are an attractive feature that results in many investors leaning towards it. The typical interest rate on FD offered by banks is lower in comparison. Corporate FDs are not influenced by the performance of the market and interest rate fluctuations.
The main reason behind many investors investing in FDs is to build wealth so that they can utilize the returns for themselves or their families. With a corporate FD, you have an option to add a nominee. So, in case of your unfortunate demise, the nominee will be able to take charge of the FD.
You can compare between different companies and find the one that fits you the best. Depending on your financial capability and your risk threshold, you can choose a corporate FD to invest in.
In a Nutshell
Investing in a corporate FD can be beneficial and help you reap rewards that are higher than that of a bank FD. You also have several features and benefits that you can experience.