Corporate FDs!

Corporate FDs are offered by NBFCs & companies who are financially stable and have good credit rating. Corporate FDs offer higher interest rates than Bank FDs which makes it attractive for investors to consider them. However, Bank FDs are insured by Deposit Insurance & Credit Guarantee Corporation (DICGC) upto Rs.5 lakh per bank account whereas Corporate FDs are not insured. So, it is imperative to choose Corporate FDs carefully by selecting only those with minimum AA credit rating. Higher credit rating means slightly lower interest rate but that is OK as capital preservation should be priority.