Bank and company
fixed deposits.
A fixed rate for a fixed period, from a bank or from a rated finance company. We place both — and show you the one difference that matters before you choose.
Compounding, and what the payout choice costs.
Taking interest monthly means it never compounds — the same rate, a smaller total.
- Principal
- ₹5,00,000
- Interest Earned
- ₹2,07,389
An illustration on the figures above, not a quote and not advice.
Two kinds of fixed deposit
A fixed deposit is money placed for a set tenure at a rate agreed at the start; the rate does not move for the life of the deposit. A bank FD is placed with a bank. A company FD is placed with a finance company, NBFC or housing finance company instead.
Bank FDs are covered by DICGC deposit insurance up to ₹5 lakh per depositor per bank; company FDs are not, and usually pay more for that reason. For company deposits we surface AAA and AA-rated issuers, where the extra return and the extra risk balance.
Company FD versus bank FD
We offer both. They look identical on a rate card and are legally quite different instruments.
| Company fixed deposit | Bank fixed deposit | |
|---|---|---|
| Issued by | Finance companies and NBFCs | Banks |
| Governed by | The Companies Act, 2013 and applicable RBI directions | The Banking Regulation Act, 1949 |
| Deposit insurance | Not covered by DICGC insurance | Covered by DICGC up to ₹5,00,000 per depositor per bank |
| Interest offered | Typically higher | Typically lower |
| Minimum tenure | Usually 6 months | From 7 days |
Deposit insurance is the material difference between the two, and it is the one most often overlooked. A corporate deposit is not covered by DICGC.
Risks involved
A fixed rate is not the same thing as a safe investment. These apply most to company deposits.
Corporate deposits are issued by NBFCs and finance companies, which carry higher credit risk than a bank. If the issuer runs into difficulty, interest or principal can be delayed or lost.
Many issuers do not permit withdrawal in the first three to six months, and premature withdrawal after that generally attracts a reduction in the interest rate.
If inflation outpaces your contracted rate, or market rates rise after you have locked in, the real return falls. The rupee amount is fixed; its value is not.
A rating is not a recommendation to purchase or hold, and there is no assurance it will stay where it is. An agency may downgrade or withdraw it if the issuer’s finances deteriorate.
Six things to check before a corporate deposit.
A deposit is only as good as the company that takes it. Pick one to see what to look for.
The credit rating
A rating from CRISIL, ICRA, CARE or India Ratings is the agency’s view of the issuer’s ability to repay on time. AAA is the strongest; each step down is a higher chance of delay or default.
- Look for
- The rating of the deposit programme itself, and its date
- Watch
- A rating on “watch with negative implications”
Fixed deposits: myth or fact?
Decide whether each is a myth or a fact, and the card turns over to tell you why.
“A company FD is insured like a bank FD.”
“The highest rate is the best deal.”
“FD interest is taxable every year, even if it is paid at maturity.”
“TDS settles my tax.”
“I can withdraw any time, like a bank FD.”
“Bank FDs are insured up to ₹5 lakh per bank.”
Fixed Deposits, step by step.
- 1Bank or company
Deposit insurance, or a higher rate with a rated issuer.
- 2Choose the tenure
A few months to several years.
- 3Choose the payout
Cumulative, or monthly, quarterly, half-yearly or annual.
- 4Get it in writing
The rate is contracted for the full tenure, and the receipt is your proof.
Understand Fixed Deposits properly.
How it works, the types, both sides and the comparisons — for when you want the full picture.
Why people use them
A bank FD carries deposit insurance up to ₹5 lakh. A company FD typically pays around 1–3% more — the compensation for taking issuer credit risk instead of bank credit risk.
From a few months to several years, so the maturity can be matched to the date you actually need the money.
Interest paid monthly, quarterly, half-yearly or annually, depending on what you choose — a genuine income stream rather than a lump at the end.
The terms and the return are specified in full from the start. There is very little to misread.
Who can invest
The eligibility is broader than most people assume, and it includes structures that a bank deposit does not always accommodate as easily.
- Individuals — resident Indians and NRIs, subject to the issuer’s terms
- Hindu Undivided Families
- Partnership firms, companies, trusts and societies
- Minors, through their legal guardians
- Financial institutions, NBFCs and banks placing surplus funds
Cumulative or non-cumulative
The same deposit, paying at two different rhythms. The choice depends entirely on whether you need the income now.
Interest accumulates alongside the principal and the whole amount is paid at the end of the tenure. Nothing is paid out along the way, so the interest itself earns interest.
Interest is paid out at regular intervals — monthly, quarterly, half-yearly or annually, as you choose. Suited to anyone who needs the deposit to produce a regular income.
Fixed Deposits, answered.
Yes, both. Tell us the amount and the tenure and we set out the bank and company options side by side, with the deposit insurance and the credit rating for each.
Share your details with us and someone from our team will take you through the options, the rate on offer for your tenure, and the paperwork. KYC is completed with the bank or the issuing company.
It varies by company. It can be as low as ₹10,000, though many issuers set a higher floor.
Typically from one year to five years, though this varies by issuer. Some accept deposits from six months.
On a non-cumulative deposit, monthly, quarterly, half-yearly or annually, as you choose. On a cumulative deposit, interest accumulates and is paid in full at maturity.
In most cases, yes. Senior citizens typically receive an additional 0.25% to 0.50% from the issuer, though this is set by the company and not by us.
Usually yes, but many issuers impose a minimum holding period of six months to a year, and premature withdrawal generally attracts a lower interest rate or a penalty. The terms are set out before you invest.
Interest on a bank or company fixed deposit is taxable as income from other sources at your slab rate. TDS applies once interest crosses the threshold prescribed for the year. If your total income is below the taxable limit, Form 15G or 15H can be submitted to the issuer to avoid TDS.
Compare three things, in this order: the credit rating, the repayment history of the company, and only then the rate on offer. The highest rate on a list is very rarely the best risk-adjusted one.
Yes. You receive an FD receipt from the issuing company — physically if you applied on paper, by email if you applied electronically. Company FD receipts are not transferable.
Some issuers accept deposits from NRIs. It varies by company, and the applicable terms and tax treatment differ from a resident deposit.
A rate that does not move.
Bank or company, we compare on safety first — insurance, credit rating and repayment history — and rate second.