In today’s world, where the prices of every product and service are soaring high, saving money is not enough. You should also look for investing and growing your wealth. For people who want to grow their income in an assured manner in a low-risk environment, a fixed deposit is the best option. You earn a guaranteed interest income in a fixed deposit investment plan by locking your money for the future. Here’s a look at how a fixed deposit works.
As we all know, banks are in constant need of money which helps them in sanctioning loans to different businesses and clients. To provide such a facility, banks offer Fixed Deposit options to all the investors which in return helps them acquire funds for a fixed period. However, opening an FD account is quite different from opening a Savings or a Current account. Once you have invested your money in a Fixed Deposit, the sum of money is blocked for a specific amount of time. This means you are not allowed to withdraw the money before the scheduled date.
Nevertheless, the investors get complete flexibility to choose the tenure of the money invested. The blocking period can be as low as 7 days to as high as 10 years. Now, as per your selected tenure, the interest rate offered by the band and the sum invested, the Fixed Deposit amount will earn interest over time on a cumulative basis.
This means that your interest income is added to your principal amount after a specific time interval, and it results in incremental growth of interest earned. Therefore, all you have to do is, invest your money and then watch it grow slowly. You can choose to receive the principal amount and interest income on maturity in cumulative FD. In non-cumulative FD, you can opt for either a monthly, quarterly, half annual or annual payout option.
You get an assured return over your investment at a fixed interest rate and for a set tenor. Even if the interest rates fall after your investment, your FD won’t be affected.
You can open a fixed deposit account within few clicks with an easy online application process. Once you start the investment, you don’t have to worry about it till it matures.
You can get regular income with a monthly or quarterly payout option on your FD.
A fixed deposit is flexible in nature as you can choose the tenor, investing amount and payout option as per your needs.
If you go for a tax saver FD, you can save up to ₹1.5 lakh as tax exemption available under Section 80C of the Income Tax Act of India
To tend to any emergency financial need, you can take a loan against a fixed deposit without breaking your FD.
You don’t need a huge amount to start a fixed deposit investment as the minimum amount in certain banks and NBFCs is as low as ₹1,000.
A fixed deposit calculator will also help in planning your investment beforehand by comparing your amount against different tenors.
NRIs can also invest their amount in a fixed deposit with NRE and NRO fixed deposits and grow their money safely.
Senior citizen FD rates are usually higher than non-senior citizen investors. With such higher interest rates, it becomes the perfect investment option for senior citizens.
FD Interest rates offered in a fixed deposit investment are higher than a normal savings account. Therefore, you earn more in a fixed deposit as compared to a standard savings account.
There are different types of fixed deposit that one can opt for as per needs. Majorly, there are two important categories of an FD, cumulative and non-cumulative. In a cumulative type of FD, the interest income and the invested capital is received at the time of maturity. Whereas, in a non-cumulative type of FD, the interest is paid on a monthly, quarterly, half annually and annual basis.
Talking about common types of FD, there is a standard FD where money is deposited for a fixed tenor at a predetermined rate of interest. A tax saver FD is where you can save up to ₹1.5 lakh in taxes with a one time deposit and the money is locked for 3 to 5 years. Regular income fixed deposits have a payout option on a monthly or quarterly basis. Senior citizen FD offers higher interest rates for citizens above 60 years of age. There are also other different types of fixed deposits such as a special fixed deposit, company or corporate FD, NRI fixed deposit, NRO fixed deposit, among others.
Bajaj Finance FD on Finserv MARKETS is one of the best options for earning a good interest income in a safe environment. You can invest your amount for a flexible tenor ranging from 12 to 60 months. This attractive interest income can be earned in a safe market environment as Bajaj Finance FD also comes with an FAAA rating by CRISIL and MAAA rating by ICRA. The interest rates of Bajaj Finance FD on Finserv MARKETS are as high as 7.05%, with senior citizens getting an additional 0.25%. Non-senior citizens can also avail an additional 0.10% of interest rate if they invest online. With periodic interest payout options, you can start your investment with an easy online process and doorstep document collection facility as well. You can also manage any emergency expense by taking a loan against a fixed deposit of up to 75% of your FD amount.