• Interest rate risk: Unlike FDs, NCDs carry interest rate risk due to changes in market interest rates.
• Liquidity: FD can’t be sold in the market. As NCDs are listed on a stock exchange, you can sell them any time you want. However, bank FDs are also highly liquid and can be en-cashed before maturity with minor penal charges.
• Taxation : In addition to interest income, there can be capital gains if you sell the NCD before maturity. However, unlike FDs, there is no TDS in case of NCDs.
• Safety: While NCDs are secured debt, corporate FDs are altogether unsecured and bank FDs are secured to the extent of Rs one lakh only.

• Rating & Safety- A lower rating signifies higher risk &vice versa.
• Company background-The credit repayment of the company & other fundamentals of the company to be carefully studied before the investment decision.

NCDs are issued by Corporates, whereas Bonds are issued by Government entities. In most cases, NCDs offer a higher interest rate than Bonds which are secured while NCDs can be secured or unsecured.