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Fed up with low bank FD rates? These corporate FDs offer up to 7.25% interest on three-year deposits

Corporate fixed deposits offer a decent avenue to get higher interest rates than what banks offer. The pitfall is the danger of default, that could crop up in low-rated FDs. Check the ratings and company financials before investing

May 18, 2022 / 08:20 AM IST
savings
Corporate fixed deposits issued by non-banking financial companies (NBFCs)/Housing Finance Companies (HFCs) offer higher interest rates than bank fixed deposits (FDs), especially the interest rates offered by public sector banks and major private sector banks. However, unlike bank FDs, DICGC does not cover corporate FDs with deposit insurance of Rs 5 lakh.

Credit Rating
Take a look at the credit ratings of FDs that are assigned by rating agencies like CRISIL, ICRA, CARE, etc. These ratings reflect the companies' ability to pay interests on time and also principal at the end of your FD tenure. The ratings, therefore, assess a company's financial health. Higher rated corporate FDs carry lower chances of defaults in interest and principal repayments. Here are corporate FDs offering the best interest rates as compiled by Paisabazaar.
STFC
Shriram Transport Finance Co. Ltd. offers an interest rate of 7.25 percent p.a. (at monthly rests) on cumulative FDs opened for a three-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,420 on the maturity date. NBFC also offers an additional interest of 0.25 percent p.a. on renewals of matured deposits. CRISIL has assigned a credit rating of FAAA/Stable to this NBFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the NBFC. Further, the credit rating agency ICRA has assigned the credit rating of MAA+/Stable to this NBFC. As per the rating agency, MAA rating indicates high credit quality with low credit risk for the depositor.

Shriram citi
Shriram City Union Finance Co. Ltd offers an interest rate of 7.25 percent p.a. (at monthly rests) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,420 on the maturity date. Additional interest of 0.25 percent p.a. on renewals of matured deposits is offered to depositors. Credit rating agency ICRA has assigned the credit rating of MAA+/Stable to this NBFC. As per the rating agency, MAA rating indicates high credit quality with low credit risk for the depositor.
Bajaj Finance
Bajaj Finance Ltd offers an interest rate of 7.00 percent p.a. on cumulative FDs opened for a 3-year tenure. The minimum deposit amount set by the NBFC is Rs 15,000. Thus, a cumulative FD of Rs 15,000 opened for 3-year tenure will amount to Rs 18,376 on the maturity date. CRISIL has assigned a credit rating of FAAA/Stable to this NBFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the NBFC. Further, ICRA has assigned a credit rating of MAAA/Stable. As per ICRA, MAAA indicates highest-credit-quality and carries the lowest credit risk for the depositors.
Muthoot Capital Services Ltd offers an interest rate of 6.75 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,165 on maturity date. Credit rating agency CRISIL has assigned the credit rating of FA+/Stable to Muthoot Capital Services Ltd. The rating agency assigns FA rating that indicates adequate safety regarding timely payment of interest and principal is satisfactory.
Muthoot Capital Services Ltd offers an interest rate of 6.75 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,165 on maturity date. Credit rating agency CRISIL has assigned the credit rating of FA+/Stable to Muthoot Capital Services Ltd. The rating agency assigns FA rating that indicates adequate safety regarding timely payment of interest and principal is satisfactory.
PNB
PNB Housing Finance Ltd offers an interest rate of 6.60 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,114 on the maturity date. Credit rating agency CRISIL has assigned the credit rating of FAA+/Negative to this HFC. As per this rating agency, FAA indicates strong chances of timely interest and principal repayment by the HFC. Credit rating agency CARE has assigned the credit rating of AA/Stable to this HFC. As per CARE, AA rating indicates a high degree of safety regarding timely servicing of financial obligations and carries very low credit risk for the depositors.

ICICI Home Finance Ltd offers an interest rate of 6.20 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 11,978 on the maturity date. CRISIL has assigned a credit rating of FAAA/Stable to this HFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the HFC. Further, ICRA has assigned a credit rating of MAAA/Stable. As per ICRA, MAAA is the highest-credit-quality rating and thus, indicates the lowest credit risk for the depositors. Credit rating agency CARE has assigned the credit rating of AAA/Stable to this HFC. As per the rating agency, AAA indicates the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk.
ICICI Home Finance Ltd offers an interest rate of 6.20 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 11,978 on the maturity date. CRISIL has assigned a credit rating of FAAA/Stable to this HFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the HFC. Further, ICRA has assigned a credit rating of MAAA/Stable. As per ICRA, MAAA is the highest-credit-quality rating and thus, indicates the lowest credit risk for the depositors. Credit rating agency CARE has assigned the credit rating of AAA/Stable to this HFC. As per the rating agency, AAA indicates the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk.

HDFC Ltd offers an interest rate of 6.30 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,012 on the maturity date. This HFC offers an additional interest rate of 0.05 percent p.a. on individual deposits renewed/placed through their online deposit system and auto-renewed deposits. CRISIL has assigned a credit rating of FAAA/Stable to this HFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the HFC. Further, ICRA has assigned a credit rating of MAAA/Stable. As per the agency, MAAA is the highest credit-quality rating and carries the lowest credit risk for the depositors.
HDFC Ltd offers an interest rate of 6.30 percent p.a. (compounded annually) on cumulative FDs opened for a 3-year tenure. Thus, a cumulative FD of Rs 10,000 opened for 3-year tenure will amount to Rs 12,012 on the maturity date. This HFC offers an additional interest rate of 0.05 percent p.a. on individual deposits renewed/placed through their online deposit system and auto-renewed deposits. CRISIL has assigned a credit rating of FAAA/Stable to this HFC. As per the rating agency, FAAA indicates very strong chances of timely interest and principal repayment by the HFC. Further, ICRA has assigned a credit rating of MAAA/Stable. As per the agency, MAAA is the highest credit-quality rating and carries the lowest credit risk for the depositors.

The data on FDs and credit ratings is as of May 11, 2022, as given on the respective websites of NBFCs/HFCs. The fixed deposit interest rates are for non-senior citizens (below 60 years of age) and the first deposit slab of respective NBFCs/HFCs is considered.
The data on FDs and credit ratings is as of May 11, 2022, as given on the respective websites of NBFCs/HFCs. The fixed deposit interest rates are for non-senior citizens (below 60 years of age) and the first deposit slab of respective NBFCs/HFCs is considered.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
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