n NISM Certifications
V-A NISM Series V-A
Medium

What is the disadvantage of company fixed deposits compared to bank fixed deposits?

Practice question from NISM Series V A - Short Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Lower rate of interest

  2. Lower safety

    Correct answer

  3. C

    Highly volatile

  4. D

    Difficult to liquidate

Why this is the answer

Company FDs are riskier as they are not backed by the same level of regulation or protection as bank FDs. They carry a higher credit risk, meaning the company may default in paying interest or principal.

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