Plan your investment
What Our Plans Cover
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A deposit with a company or NBFC a...
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Cumulative or periodic interest pa...
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Tenures typically 12 to 60 months
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Nomination facility
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Premature withdrawal after a lock-...
Who Can Consider This Plan?
- Indian resident individual, HUF, trust, firm or company
- NRIs, through NRE, NRO or FCNR deposits
- Minors, through a guardian
- PAN, required to avoid a higher rate of tax deduction at source
- Completed KYC with the institution
What May Not Be Covered?
- DICGC insurance — corporate deposits are not covered
- Any government guarantee
- Premature withdrawal inside the initial lock-in period
- Protection if the issuer defaults
- Tax exemption — interest is fully taxable
Always check the policy wording before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading investments companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced investments professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
A corporate fixed deposit is a deposit with a company or non-banking financial company rather than a bank. Rates are typically one to two percentage points above bank deposits, which is the entire attraction.
That spread is compensation for credit risk. There is no DICGC insurance on a corporate deposit — if the company defaults, you are an unsecured creditor. The rate is higher because the risk is higher, and treating the extra return as free money is the mistake this category punishes.
Credit ratings are the tool for assessing that risk, and they are worth taking seriously. AAA-rated deposits from established institutions carry very different risk from unrated or lower-rated ones offering the highest advertised rates. The rate on offer is usually a good indicator of where on that spectrum a deposit sits.
Who should consider it
Savers comfortable assessing credit risk who want a higher rate on a portion of their fixed income. Investors spreading across several highly rated issuers rather than concentrating.
It is not appropriate for an emergency fund or for money that must be there with certainty.
Benefits
- Rates typically one to two percentage points above bank deposits
- Additional rate for senior citizens at most issuers
- Cumulative and periodic payout options
- Available from well-rated NBFCs and established corporates
- Tenures generally from one to five years
- Loan against the deposit at some issuers
What is included, and what is not
Read the right-hand column first. It is the one that tends to surprise people later.
Included
- A deposit with a company or NBFC at a fixed rate
- Cumulative or periodic interest payout
- Tenures typically 12 to 60 months
- Nomination facility
- Premature withdrawal after a lock-in, with penalty
Not included
- DICGC insurance — corporate deposits are not covered
- Any government guarantee
- Premature withdrawal inside the initial lock-in period
- Protection if the issuer defaults
- Tax exemption — interest is fully taxable
Terms vary between providers and between plans from the same provider. The offer document you receive is what governs — we will walk you through it before you commit.
How it works with us
- 1 We work out what the deposit is actually for An emergency fund, a dated obligation, or long-term savings. Only the first two are really jobs for a deposit.
- 2 Rates compared across banks, small finance banks and corporates The spread is wider than most savers realise, and so is the difference in safety. We show both sides.
- 3 Tenure and payout structured around your tax position Cumulative or non-cumulative changes when the tax falls due. For some savers that matters more than the rate.
- 4 Opened, with nomination and Form 15G/H handled The two administrative steps savers skip and later regret. We complete both at opening.
- 5 Maturity tracked, and reinvestment decided deliberately Auto-renewal at whatever rate happens to prevail is a decision by default. We flag maturities so it is a decision by choice.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Read the credit rating and understand what it means. AAA is not the same as AA, and unrated deposits offering the highest rates are the ones to be most careful about.
- There is no deposit insurance. If the issuer defaults you are an unsecured creditor, and recovery in such situations is slow and partial at best.
- Spread across issuers rather than concentrating. The extra return does not justify placing a large share of your fixed income with one company.
- A very high advertised rate is information. Issuers pay what they must to raise money, and the highest payers are usually those who cannot borrow more cheaply.
- This is not where an emergency fund belongs. Lock-ins apply and liquidity is poorer than a bank deposit.
Documents required
- PAN card
- Identity proof — Aadhaar, passport or voter ID
- Address proof
- Recent passport-size photograph
- Existing bank account details, where opening with your own bank
- Form 15G or 15H, where applicable, to avoid tax deduction at source
- Nomination form
Frequently Asked Questions
Why are corporate deposit rates higher?
Because you are taking credit risk that a bank deposit does not carry. There is no DICGC insurance, and if the issuer defaults you are an unsecured creditor. The extra one or two per cent is the price of that risk, not a free upgrade.
How do I judge the safety?
Start with the credit rating from a recognised agency. AAA-rated deposits from established institutions carry materially lower risk than lower-rated or unrated ones. The rate itself is also informative — issuers pay what they must, and the highest payers are usually those who cannot raise money more cheaply.
Is there any deposit insurance?
None. DICGC cover applies to bank deposits only. That absence is the central difference between this and a bank deposit, and it should drive how much you place and with whom.
Can I withdraw early?
Usually after an initial lock-in of three to six months, with a penalty on the rate. Liquidity is generally poorer than a bank deposit, which is another reason this is not the place for an emergency fund.
How much should I put in corporate deposits?
A portion of your fixed income allocation, spread across several highly rated issuers rather than concentrated in one. The additional return is worth having; it is not worth taking a concentrated exposure to a single company for.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.