Are corporate fixed deposits a good idea for investing your money?

Corporate FDs often offer higher interest and flexible tenures, but they also carry greater risk than bank FDs. Here is what investors should consider before putting in their money

A lot of retail investors may be unaware of a different kind of fixed deposit than those offered by banks. These are corporate FDs or company FDs, typically offered for sale by private firms or by non-banking financial companies (NBFCs). Such instruments typically offer marginally higher rates of interest than banks, but it is important to check the credit ratings for such investment vehicles. They also tend to offer greater flexibility in terms of tenure. The downside is that they also carry more risk than banks FDs, and unlike the latter, are not insured by the DICGC. Then there is always the risk of the private firm defaulting on payments.