High-Yield Corporate FDs: Top 10 picks with credit ratings

When choosing corporate FDs, it's crucial to check credit ratings from agencies like CRISIL, ICRA, and CARE.

• NBFCs and HFCs offer higher FD rates than banks due to increased credit risk
• Check credit ratings from agencies like CRISIL, ICRA, and CARE before investing
• Senior citizens get additional interest on select corporate FDs

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Non-banking financial companies (NBFCs) and housing finance companies (HFCs) offer higher interest rates on corporate fixed deposits compared to public sector banks and major private sector banks due to the credit risk associated with them.

A simple way to gauge risk is to check credit ratings, which help assess the creditworthiness of NBFCs and HFCs. Generally, those with lower ratings are riskier and offer higher interest rates, while higher-rated ones are considered safer.

When choosing corporate FDs, it's crucial to check credit ratings from agencies like CRISIL, ICRA, and CARE. These ratings reflect the financial health of the issuing NBFC or HFC, with higher ratings indicating lower default risk and more reliable interest and principal payments.

Here are ten corporate FDs that offer the best interest rates. Paisabazaar.com compiled the list with data as on 14 January 2026.

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Corporate FDs with higher interest rates

Muthoot Capital Services Ltd., with a CRISIL A+/Stable rating, is offering a whopping 8.95 percent interest rate, with an additional 0.25 percent for senior citizens. Manipal Housing Finance Syndicate Ltd., rated ACUITE A, is close behind with 8.25 percent and a similar additional interest rate for seniors.

Shriram Finance, with a ICRA AA+ (Stable) rating, is offering 7.60 percent with an additional 0.50 percent for senior citizens. Can Fin Homes Ltd., boasting an ICRA AAA/Stable rating, offers 7.50 percent with 0.25 percent to 0.50 percent additional interest for seniors.

Other notable mentions include Mahindra Finance and Sundaram Home Finance, both with AAA/Stable ratings from CRISIL, offering 7 percent with varying additional interest rates for senior citizens.

Bajaj Finance Ltd. and ICICI Home Finance, also with AAA/Stable ratings, offer 6.95 percent and 6.90 percent respectively.

Common mistakes to avoid

Investing in corporate FDs requires careful consideration to avoid common pitfalls. Don't invest blindly or based on hearsay; instead, evaluate your financial goals then decide to invest.

Compare rates, tenors, and features to choose the best fit. Avoid premature closure, which can lead to penalties and lost interest. Consider inflation's impact and don't rely solely on FDs; diversify your portfolio to optimize returns.

When choosing a corporate fixed deposit, consider both the rate and the credit rating. A slightly lower rate with a higher rating might be a better bet than a higher rate with a lower rating. Do your research, weigh your options, and invest wisely.