Corporate FDs/Bonds

Company or Corporate Fixed Deposits (FDs) are similar to Bank FDs with the main difference being that Company FDs are issued by Non Banking Financial Companies eg Bajaj Finance. Company FDs provide higher interest than banks but the risk is a bit higher than that from banks hence while investing you need to check the rating of the company

Bonds are fixed income instruments similary to FDs and pay regular interest and principal amount on maturity and generally provide higher interest rates than Bank FDs. The prerequisite of investing in bonds is that you need to have a demat and trading account. Thus you can either buy bonds during IPO period or directly from the secondary market. WHile investing in bonds you need to be aware of the bond rating and whether the bonds are secured/unsecured. Examples of bonds are Infrastructure bonds, 54EC bonds and Sovereign Gold Bonds