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Company FD or Bank FD: Who Will You Trust Your Money With?

  • Highlights

  • Company vs Bank Fixed Deposits: Benefits & Features

  • Company fixed deposits are not influenced by market forces

  • Bank fixed deposits offer better security, but less liquidity

  • Study the market for best options, evaluate and prioritize well




There has always existed a strong debate between those investing in bank fixed deposits and those investing in company fixed deposits. That is why it is important to consider the features of both the options before planning your next move. It is also important to study the FD interest rates before the final decision.

To make matters simpler, you can also look up and view the characteristics of both Company Fixed Deposits and Bank Fixed Deposits. Then, you can compare their attributes to your requirements and make a final decision. Both types of deposits have unique benefits that can help a range of various investors in numerous ways.


Company Fixed Deposits

Benefits and Features of Company Fixed Deposits (FD)

1) Company FDs are fixed deposits that are offered by companies and financial institutions.
2) These deposits function as the regular fixed deposits, but feature higher interest rates.
3) They are low risk investments and do not face influence of market forces.

4) They may be flexible in some cases. This means that you get to choose your tenor or maturity terms.
5) Company FD can be liquidated easily depending on the terms of the institution.
6) These accounts may offer premature withdrawals without restrictions.
7) The money from Company FDs can be used for any purpose like financing a holiday or even purchasing an asset.
8) They offer non-cumulative and cumulative interest pay-outs.
9) They feature safety ratings by credit agencies like ICRA and CRISIL. You can choose one based on how high the ratings are.

5 advantages FDs offer investors

Additional Read: Should you choose Bajaj Finance Cumulative or Non-Cumulative Fixed Deposits?

Bank Fixed Deposits

Benefits and Features of Bank Fixed Deposits(FDs)

1) Bank Fixed Deposits are offered by registered private or state banks.
2) The interest rates on these fixed deposits are lower, as banks offer high level of security to the account. These FDs are secured by the RBI up to Rs.1 lakh.
3) Banks, however, also have rigid terms and rules. These rules make premature withdrawing difficult.
4) Bank fixed deposits may be less liquid in comparison to company FDs.
5) Depending upon bank rules and regulations, you could be levied a penalty for premature withdrawal.
6) Banks may give additional privileges to customers you already have a savings account with the bank.
7) Bank FDs are also divided into cumulative and non-cumulative FDs.

Additional Read: How to choose the best FD plan in 2019

Tips to consider before making a choice>

1) Study the market: Before arriving at any conclusion, first study the market and look at all the various options of FDs available.
2) Make a list of your needs and requirements: It is important to ask yourself what you want from the FD. Thus you can make a list of your requirements. This could consist of your purpose for investing.
3) Evaluate and prioritize: Evaluate all your needs and prioritize which you should consider to be given the highest priority.
4) Review the options: Once you have evaluated and prioritized, review the options along with their interest rates, and analyse all their attributes and benefits.
5) Choose the appropriate option: Once you have found the appropriate plan that matches all your requirements, sign up for that fixed deposit and don’t hesitate to save smart.

Additional Reading: Short-term or Long-term FD: Which FD is best for you?

Reason to invest in FD

Final Decision Depends on your Needs

Both Bank Fixed Deposits and company fixed deposits are good in their specific ways. Much of the final decision depends on your needs. For instance, if you want more security, then bank deposits are good. But if your priority lies in receiving higher interest, then company deposits are ideal.
Apply for a fixed deposit, where you can get free online access, attractive interest rates and many more facilities that will ensure your satisfaction. Calculate your potential returns on an investment using an FD Calculator that helps you plan your finances better.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.

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