Just like banks offer fixed deposits as investment options, similarly corporate companies, too, come up with their fixed deposits. These companies use FDs to raise money for their varied requirement.

Corporate FDs work the same way as bank FDs do. They have their predefined tenure, maturity date, rate of interest etc.

However, because lending to corporates is relatively riskier than lending to the banks (in the form of FDs), corporate FDs tend to give their investors better rates of interest.