NiveshLedger
Fixed Income

What is Corporate FD?

Updated 20 August 2026

A fixed deposit offered by a company (rather than a bank), typically paying a higher interest rate to compensate for the additional credit risk involved.

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A Corporate FD is a fixed deposit scheme offered directly by a company, usually an NBFC (non-banking financial company) or a large corporate, rather than by a bank. Companies raise money this way and, in exchange for lending them your money, typically offer a noticeably higher interest rate than a comparable bank FD of the same tenure.

The higher return comes with meaningfully higher risk: unlike bank deposits, corporate FDs are not insured by the DICGC, so if the company runs into financial trouble, your deposit isn't protected the way a bank deposit up to ₹5 lakh would be. Before investing, it's important to check the company's credit rating from agencies like CRISIL or ICRA — a higher rating (like AAA) signals lower risk of default, though even highly-rated companies aren't entirely risk-free.