Corporate FDs issued by the NBFC arms of various businesses (e.g., Bajaj Finance, Mahindra Finance, HDFC) in recent times have emerged as a viable investment avenue for financially savvy investors who are desirous of parking a slice of their surplus funds in debt instruments. Companies often see this as a speedy route to raise the capital they need to grow the business. These are attractive since they provide a richer yield of, say, 9-11.5%, over a fixed term of 12 to 60 months. Compare this with the average 8.5% interest returned by bank FDs. However, there are some risks around corporate FDs versus comparable bank FDs. And the risks are real. Key among the risks is the likelihood of default by the company concerned especially considering that corporate FDs are not backed by collateral of any kind, which means the investor cannot recoup the capital by selling her/his corporate FD receipts. Whereas in case of a bank FD, there is a deposit insurance cover of INR 5 lacs; RBI is