Earn interest up to 8.10% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

A fixed deposit scheme, which is also popularly called an FD, is a savings cum investment tool offered by various banks and Non-Banking Financial Companies. The best part about this investment option is that it is specially designed to keep your money safe and growing.

 

When you invest in a Fixed Deposit, you deposit a certain sum of money at a particular interest rate for a fixed time period. When this tenor ends and the maturity period begins, you can get the principal amount you invested along with the interest. Hence, this is a good money-saving tool that can help you with extra savings.

Several banks and NBFCs offer different rates of interest on fixed deposits. You can select a tenor as per your preference and comfort ranging from a minimum of 7 days to a maximum of 10 years. When you book a fixed deposit, the sum of money is guaranteed and the rate of interest will remain the same till maturity.

 

There is an option on how you earn the interest. You can either choose to get the interest paid at the time of the maturity of the FD or periodically, based on your need. However, you should remember that you cannot withdraw any money from your FD account before maturity. If you do so, you will incur a penalty.

Benefits of Saving Through a Fixed Deposit

Now that you know enough about an FD, its tenor, and interest rates, it is essential to understand the best features and benefits of an FD. Here are the top advantages of a fixed deposit.

  • Guaranteed Returns

The amount of the interest earned on a fixed deposit is guaranteed. You will surely get the same at the time of maturity of the FD. Unlike other market-led investments such as Mutual Funds, which offer returns according to market fluctuations. A fixed deposit offers the same amount to you as promised in the beginning or at the time of opening the FD account.

 

You will continue getting the same FD rates as agreed, till the maturity period. Even if the interest rates fall for the new customers, the same will not apply in your case. Hence, it can be said that the fixed deposit is one of the most secure forms of investment.

  • Withstand Financial Slowdowns

As stated earlier, market fluctuations do not affect the returns you get on your FD. As agreed in the beginning, you will continue getting the same amount of return, even when the financial market slows down.

  • Avail a Loan Against an FD

If you plan to apply for a loan and need collateral, FD is considered as collateral, against which you can get your loan amount approved. You can avail a loan and meet your urgent need for funds. This will also save you from withdrawing the FD prematurely.

  • Receive Interest at Regular Intervals

If you are a retired professional who is looking for a monthly income, then FD offers you that benefit. You can choose the option of earning regular interest on your FD that can be disbursed to you monthly or half-yearly, etc. as per your preference and needs.

  • Interest Accumulation

One of the strongest reasons why people choose to go for FDs is that they are able to generate a lot of extra income due to the accumulation of the interest amount. If you invest a certain sum of money, let's say Rs. 2 Lakhs in an FD for a period of 2 years, at an interest rate of 6.95%, the amount of interest earned will be Rs. 28,766. A bigger amount of money for a higher tenor will get you a more attractive interest rate, and you will be able to earn much more than this.

  • FD as a Saving Tool

FD is one of the best savings tools as compared to other modes of investments and they generate a much higher return compared to other forms of investment. For example, a savings account provides an annual interest rate of just 4 to 5% on your money in the account. While fixed deposits fetch you around 7% interest rate annually.

  • Tax Deduction

As per tax laws, if you invest in a tax saver FD, you can claim the invested amount, up to Rs 1.5 Lakhs as a tax deduction, as per Section 80C of the Income Tax Act.

  • High Interest Rate

FD offers a high interest rate, as compared to the savings bank account. Various banks and NBFCs offer different interest rates to FD holders. Fixed Deposit is a more lucrative proposition to the senior citizens as it is one of the safest investment options offering higher interest rates as compared to the regular fixed deposit interest rates. Since they get an increased rate of interest, they are able to get more money or a higher return on investment.

 

Also, you must know that if you choose NBFCs for creating an FD account, then you will get a much higher rate of interest as compared to bank FDs.

Bank’s Name

Interest Rate

Senior Citizen Interest Rate

Tenor

SBI

2.90% - 5.50%

3.40%-6.30%

7 days-10 years

HDFC Bank

2.50% - 5.60%

3.00% - 6.35%

33-99 months

ICICI Bank

2.50% - 5.50%

3% - 6.30%

7 days -10 years

PNB Bank

2.90%-5.25%

3.40%-5.75%

1-10 years

Canara Bank

2.90% - 5.50%

2.90% - 6.00%

15 days - 10 years

Union Bank

3.00% - 5.50%

3.50% - 6.10%

7 days - 10 years

Kotak Bank

2.50% - 5.61%

3.00% - 6.14%

7 days - 10 years

NBFC’s Name

Interest Rate

Senior Citizen Interest Rate

Tenor

Bajaj Finance FD

6.93% - 7.85%

7.16% - 8.10%

1 - 5 years

PNB Housing Finance FD

6.57% - 7.55%

6.82% - 7.80%

1 year - 10 years

Mahindra Finance FD

6.30% - 7.75%

6.55% - 8.00%

1 year - 5 years

As you can see, NBFCs offer better interest rates on FD as compared to banks.

 

Unlike other saving avenues, in which the returns are dependent on market volatility, Fixed Deposit is one of the safest modes of investment as it is not affected by fluctuations in the market. Young investors who do not have much knowledge about the market and their investment options should start their investment journey with an FD.