Corporate FD vs Bank FD: Bajaj Finance, Mahindra Finance, HDFC Bank, SBI FD interest rate comparison

Both, banks and NBFCs, offer fixed deposits. Banks provide fixed deposit (FD) accounts. Companies offer corporate fixed deposits. Many institutions and NBFCs are permitted to receive deposits for a defined period at a prescribed interest rate, just like banks. These are referred to as corporate FDs

Corporate fixed deposits

The RBI allows certain corporations and NBFCs to accept deposits with a fixed interest rate and term. These are known as Company or Corporate Fixed Deposits. Corporate and housing finance companies (HFC) offer FDs that have a fixed interest rate. As a result, businesses are able to raise money and use it for their operations, and depositors receive guaranteed interest returns on their money

Interest is paid on a semi-annual basis in a ‘non-cumulative plan.’ The system will be useful for retirees who require monthly interest payments. In the ‘cumulative deposit plan,’ the interest is paid concurrently with the principal at maturity. This program, which may be viewed of as a money multiplier system, is appropriate for persons who do not require periodic interest payments.

Bajaj Finance

Deposits will now generate a maximum cumulative return of 7.35 percent after being held for 44 months. Senior citizens may benefit from FD rates that are up to 0.25 percent higher, resulting in 44 months of 7.60 percent guaranteed returns. Currently, seniors can earn up to 6.85 percent annually for terms of 24 to 35 months and 7.45 percent annually for terms of 36 to 60 months (except 44 months).

Mahindra Finance

The MMFSL Fixed Deposit has an India Ratings – ‘IND AAA / Stable’, indicating the highest level of safety, asd per the website. Samruddhi Fixed Deposits have an additional 0.25 percent interest rate for older residents. The minimum deposit for the cumulative deposit scheme is Rs 5,000 and under the non-cumulative scheme is Rs 25,000 half yearly and Rs.50,000 quarterly.

The company offers interest rate between 6.55 – 6.88 percent.

FD interest rate

For tenure 91 days to 6 months FDs will earn 3.75 percent, up from 3.50 percent, and 1 year to 2 years FDs will earn 5.35 percent, up from 5.10 percent.

Now the interest rate offered on 2 years 1 day to 3 years is 5.50 percent from earlier 5.40 percent. The interest rate is increased to 5.70 percent for deposit tenure 3 years 1 day- 5 years from 5.60 percent.

According to SBI’s website, the bank has raised the interest rate on FDs with terms ranging from 211 days to less than a year by 20 basis points to 4.60 percent. For 1 year to less than 2 year, the interest rate offered has been hiked to 5.30 percent from 5.10 percent. And the interest rate has been raised by 15 basis points on 2 years to less than 3 years tenor FDs to 5.35 percent from 5.20 percent.