Corporate FDs are deposits made with corporate companies at a fixed interest rate for a particular time period. These fixed deposits are a source of finance for companies and an investment alternative for investors who do not want high risk and desire moderate interest rate.

They are very safe and assure fixed returns over a time period along with reimbursement of principal amount. Payment of interest is given first priority after all the expenses are paid. Therefore, corporate FDs prove to be very safe in terms of investing.

The investor should choose the desired company first. Analysis of the financial position of the company, its market share, its goodwill, liquidity, management, board of directors, all play a major role in evaluating a company. The investor should also study the historical data of the company as well as must know the future plans and vision of the company.

Corporate FDs offer higher returns than bank FDs. This is the main advantage of corporate fixed deposits. Adding to that, the risk is comparatively low than other investment options. This makes corporate FDs better than bank fixed deposits.