Indian investors consider fixed deposits as one of the safest investments that offer risk-free and guaranteed returns. However, fixed deposits are not just limited to banks. Non-Banking Financial Companies/Institutions(NBFCs/NBFIs) also offer fixed deposits.
Let us understand how they are different from Bank FDs.
There are certain factors that you must keep in mind before opting for corporate FDs:
RATINGS
Agencies like CRISIL, ICRA, and CARE are globally recognized rating agencies that provide an unbiased opinion on the creditworthiness of an institution that should be considered before investing.
These ratings apply to both Bank and Corporate FDs. The Corporate FDs offered by AssetPlus is the highest rating (FAAA/AAA) applicable for any Fixed Deposit. Since these are highly rated FDs, the chances of default are very minimal or negligible.
WITHDRAWAL POLICY
In Corporate FDs, clients can withdraw the amount before maturity depending upon the duration from the initial date of investment with certain restrictions.
All Fixed Deposits offer relatively safe returns as they are not influenced by the ups and downs of the market. Before suggesting Corporate FDs, it is important to understand if they meet the liquidity needs and financial goals of the investors.