Firstly, CFDs typically offer higher interest rates than bank FDs. This is because corporates are willing to offer a higher rate of return in order to attract deposits from investors. Additionally, CFDs are not subject to the same restrictions and regulations as bank FDs, which allows corporates to offer more competitive interest rates.

Secondly, CFDs are generally more flexible than bank FDs. While bank FDs typically have fixed tenures and withdrawal restrictions, CFDs can often be customized to meet the needs of investors. For example, CFDs may offer flexible tenures, varying interest payment schedules, and other features such as the ability to withdraw funds early with a penalty.

Thirdly, CFDs are not subject to the same credit risk as bank FDs. When an individual invests in a bank FD, they are essentially lending money to the bank. In contrast, when an individual invests in a CFD, they are lending money to a corporate entity. As corporates are typically more financially stable than banks, the risk of default is generally considered to be lower.

However, it is important to note that CFDs are not without risk. Investors should carefully research the company offering the CFD and ensure that they are comfortable with the creditworthiness of the corporate entity. Additionally, CFDs are not insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), which provides insurance for bank FDs up to a limit of Rs. 5 lakh per depositor per bank.

In conclusion, CFDs can be an attractive alternative to bank FDs in India, offering higher interest rates, greater flexibility, and lower credit risk.