Meaning of Fixed Deposits (FDs)

A fixed deposit simply means an amount of money which is deposited in an account for a fixed tenure, and earns a specific amount of interest. As an investor, you can open a fixed deposit in financial institutions like banks and Non-Banking Finance Companies (NBFCs). The rate of interest on fixed deposits it much higher than tradition saving deposits. You can also invest your money in flexible tenures ranging from 1 to 5 years. Among the myriad investment plans available in the MARKETS, fixed deposits stand out for being safe and reliable investment plans offering not only assured high returns, but also the safety of the principal amount.

Types of fixed deposits

There are two types of fixed deposits, Bank deposits and company deposits. While some bank deposits provide features like deposit insurance of up to Rs 1 lakh on opening fixed deposit accounts, their rates of interest are usually lower than those provided by NBFCs. If you are an investor looking for higher returns, they you can consider company fixed deposit. You must, however, ensure that investments are only made in companies with adequate credit worthiness. On Finserv MARKETS, you can select fixed deposits, which have good ratings from leading analytical companies like CRISIL and ICRA. Bajaj Finance Fixed Deposits has the highest stability rating of ‘FAAA’ by CRISIL and ‘MAAA’ by ICRA. In 2019, Bajaj Finance Ltd was assigned a long-term rating of ‘BBB-/Stable’ and a short-term rating of ‘A-3’ by S&P Global Ratings.

How to apply for FDs?

Eligibility conditions: The following people are eligible to apply for a fixed deposit:

  • Resident Indian citizen.

  • Hindu Undivided Family (HUF).

  • Sole proprietorships, partnership firms, and companies, including group companies.

  • Clubs, associations, and societies.

  • Family trusts.

  • NRIs, PIO and OCI.

Minimum deposit: Without waiting to accumulate a large corpus, you can easily open a fixed deposit with a minimum investment of just Rs 25,000.

Documents required to open a fixed deposit: As an investor, a fixed deposit requires minimum documentation. You are usually required to submit KYC documents along with recent photographs and a copy of the bank account together with a cancelled cheque. The proof of identity documents include, Aadhar card, PAN card, driving license, voter ID card or any government issued ID card. As proof of address, you can submit a passport, electricity bill or fixed line telephone bill. If you are an existing customer of Bajaj Finance, you are not required to submit any documents while opening a fixed deposit.

Steps to open a fixed deposit account online

  • Step 1: You must fill the online application form , and deposit the money through net banking, RTGS/NEFT or cheque.

  • Step 2: Access your filled-out form by clicking on ‘Save as PDF.’ A representative will then get in touch with you.

  • Step 3: Print and sign your application form. You must keep your KYC documents ready.

  • Step 4: Submit the documents along with a CTS complaint check to the representatives. Your fixed deposit has now been booked.

Key features of fixed deposits

A fixed deposit offers several benefits to investors. Some of the key features of a FD are:

Provides stable returns: Fixed deposits provide a high rate of interest to investors. You can invest in the Bajaj Finance Fixed deposit, available on Finserv MARKETS, which provides an interest rate of up to 8.95%. While a new customer can avail an interest rate of 8.60% for cumulative scheme tenors ranging from 36 to 60 months, existing FD customers receive an interest rate of up to 8.85%. Senior citizens who invest in similar fixed deposits can avail an interest rate of up to 8.95%. You must always remember that cumulative fixed deposits provide better interest rate as compared to non-cumulative FDs. In the case of cumulative FDs, interest rate on the deposit is provided to a customer after maturity, while in non-cumulative FDs, you can avail interest payouts on a monthly, quarterly, half-yearly or annual basis.

Tax benefits: As an investor, you can avail tax benefits on your fixed deposit interest. You can claim a tax benefit of up to Rs 1.5 lakh in a tax-saving fixed deposit account under Section 80 C of the Income Tax Act. The tax-saving fixed deposit has a lock-in period of a minimum of five years.

Flexibility of tenors: As an investor, you can select a fixed deposit on the basis of your financial needs. You can avails tenors ranging from one year to five years. There is also the option of opening multiple fixed deposits with different tenors to suit your financial goals.

Hassle-free loan facility: You can avail hassle-free loans through your fixed deposit. Loans against fixed deposit are easy to secure as the fixed deposit itself is used as collateral. The maximum amount of loan is generally a certain percentage of the principal deposit. This varies across financial institutions. For example, on Finserv MARKETS, you can avail of a loan up to 60% of the amount invested in non-cumulative fixed deposits and 75% of the amount invested in cumulative deposits.

Forecasting of returns: You can also avail the benefit of instantly calculating returns on your FDs through an online interest calculator. You can easily use this simple and convenient tool by providing the amount to be deposited, the deposit term and the interest rate being offered. On Finserv MARKETS, you can use the Bajaj Finance Fixed Deposit online calculator to evaluate your returns before investing.

Service facilities offered to fixed deposit account holders:FD account holders can avail a slew of benefits on Finserv MARKETS. These include:

  • Easily accessible touch points.

  • Simple and transparent policies.

  • Detailed SMS and email communication to customers while booking a fixed deposit, from request to maturity.

  • Scanned copy of all the documents submitted by you, available online for easy access.

General FAQs

Q. Are there any benefits on renewal of FDs?

A. An additional rate of 0.10% per annum for deposits up to Rs 5 crore is applicable on Finserv MARKETS, if you want to renew your FD. For example, if you want to renew your deposit for a tenor of 48 months in annual cumulative mode, then you will get an interest rate of 8.70%. This includes the existing rate of 8.60% plus the additional rate of 0.10%.

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