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How are fixed deposits different from savings accounts?

By Finserv MARKETS - Aug 1,2019
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How are fixed deposits different from savings accounts

The global findex report released by The World Bank last year revealed that a whopping 1.57 billion Indians had bank accounts which grew by a huge margin of 80% as compared to 2011. Gender is no longer a constraint with 83% males and 77% of females holding their own accounts. This is good news for proponents of financial inclusion since it eliminates dependence on unorganized players for both savings and credit. However, just parking your money in a savings account should not be the goal.

Here’s why. Mr A puts Rs 50,000 in his bank account. The least amount of interest paid by most banks is 3.5% per year with some paying as much as 6%. Interest is calculated daily with banks crediting it to your account on a half-yearly or quarterly basis, however, the returns are marginal. On the other hand, putting this money in a Fixed Deposit, for the same tenure, he could earn an interest ranging from 7.5% to 8.95% per annum, which is almost double. This simple calculation is enough to show the merits of parking funds in a bank deposit .

Guaranteed returns

While a savings account gives you the freedom to withdraw and deposit money as per your needs, when it comes to investing, it doesn’t offer any great benefits. Just like your wallet, you can use it for transactions that you do on a daily or monthly basis. Whereas in a Fixed deposit, money is locked for the period specified, at an interest rate decided by your bank, and any withdrawal before maturity attracts a penalty that has to be borne by the investor. However, that should be seen as an incentive to encourage saving, as they give you guaranteed returns, irrespective of market fluctuations and risks. Fixed Deposits on Finserv MARKETS offer a lucrative interest rate of 8.60 per cent, which can go up to 8.9%, helping you accumulate wealth and grow your corpus.

Choose your tenure as per your needs

One can opt to lock funds for 12 to 60 months depending on their financial needs. This not only helps you take control of your liquidity needs but also helps you synchronise your investments so that you can enjoy a higher cash inflow. You can have multiple FDs for same or different tenures to suit your requirements. Fixed Deposits on Finserv MARKETS are highly rated. They have a CRISIL rating of FAAA and an ICRA rating of MAAA. This assures you that your investment is not at risk.

Easy and hassle-free investment

Start investing with as low as Rs 25,000 and enjoy higher returns as your money works for you and your corpus grows. Not only this the application process is fully online, to help you save time with all the paperwork and documentation and long queues at bank branches. Opting for the auto-renewal of your deposit helps grow your funds until you decide when you want to withdraw them. The customer can also choose the frequency of interest as per their convenience on a monthly, quarterly, or yearly basis. Alternatively, they can opt for a Cumulative FD in which the interest is reinvested, giving even better returns.

Your rock during hard times

Not only can you avail a loan up to 90% of the principal of your bank deposit, but you also keep earning interest as usual, so that you don’t have to liquidate your account. In case of an emergency, you also have the option of breaking your FD prematurely which will attract a small fine, if you wish to do so.

If you are curious how can an FD help your savings grow, an FD calculator can help evaluate your returns in advance, even before you make an investment. This will help you plan out your goals and tie your savings to them so that you have more clarity. With the rising cost of living, everyone would need to up their savings game from a plain vanilla savings account to deposits with higher returns and multiple benefits to staying financially secure. Begin your fixed deposit journey with Finserv MARKETS, an online portal that allows you to invest in FDs in a quick, transparent manner with minimal documentation or bureaucracy.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no-cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522