The impact on the economy due to the pandemic of coronavirus has driven RBI to slash the repo rate on several occurrences in the near times, resulting in banks reducing their fixed interest rates on deposits. Indeed, several public sector, private and multinational banks currently provide interest rates on their fixed deposits between 2.3 per centto 6 per centper annum. This emerges as a pertinent development for risk-averse investors who ultimately depend on bank deposits for their livelihood and strategic financial target. Company or corporate FDs are equivalent to bank FDs and are completely taxable according to the investor’s income tax slab. Fixed deposits of companies may have guaranteed returns that may be higher than bank FDs, but the tenures typically vary from 12 months to 120 months with moderate risks. Senior citizen depositors can also seek special rates on company FDs up to 0.5 per cent. But before going for corporate FDs, it is suggested to check the credit scores and invest only in those companies that hold AAA, AA and AA+ scores from entities such as Crisil, ICRA, CARE etc. However, the highest-rated corporate FDs can be considered in moderation for risk diversification to gain better returns than bank FDs. So let’s have a look at the five corporate FDs that are offering higher returns at the current COVID stage.
