When is the Right Time to Invest in a Fixed Deposit?

 A fixed deposit is an efficient way to multiply your money. It offers more interest rates than a standard savings account. You just have to deposit your lump sum amount of money and you will earn an interest income for the set tenor and at a predetermined interest rate. A fixed deposit is offered by various banks, corporate institutions, NBFCs or even a post office. However, choosing the right time to invest in a fixed deposit is crucial. Here is a look at the factors that determine the right time to invest in a fixed deposit.

What is the Right Time to Invest in a Fixed Deposit?

• Considering Your Current Income

Before starting a fixed deposit, it is important to assess your current income. For example, if most of your income is going towards paying bills among other things, you will first have to accumulate the funds required to invest. Instead of directly deducting the amount that you wish to invest, you should plan and keep aside a part of your investment every month. This way you will have the desired amount for a fixed deposit without having to cut down on any expenses.

• Be Aware of Taxable Income

The interest income earned on a fixed deposit is fully taxable. A 10% TDS is applicable if the interest income in a financial year is above the set limit of ₹40,000 (₹50,000 for senior citizens). Once you are aware of all the taxation policies, you can start investing in a fixed deposit.

• Thorough Research

It is always a good idea to invest in a fixed deposit after conducting thorough research of the market. Keep an eye on the FD interest rates offered by various banks and NBFCs. You will then have an idea of when the interest rates are high and low. You should also note that NBFCs like Bajaj Finance FD offer higher FD interest rates than a bank FD.

• Make the Most of Laddering

The FD interest rates can change frequently. If you invest a larger amount for a long tenor, it is possible that the FD rates may change and get higher. Therefore, to avoid this possibility of having your investment amount stuck at lower FD rates, you should invest in FDs with different tenors. By laddering, you can reinvest your short term FDs again when the rates increase. This also offers great liquidity and flexibility as all your money is not stuck in one fixed deposit.

How to Open an FD Account?

There are two ways to open a fixed deposit account, online and offline. Here is a look at both of them.

How to open an FD account online?

Different banks and NBFCs have their own way of starting a fixed deposit account. Mentioned below is the generic procedure to start a fixed deposit account:

• Step 1: Go to the official website of the bank or NBFC where you want to start a fixed deposit account.

• Step 2: Login using your credentials or register with a new ID

• Step 3: Select the ‘Fixed Deposit Account’ option from available facilities

• Step 4: Enter the required details like the amount of investment, tenor and type of FD

• Step 5: Upload the scanned copies of required documents to start a fixed deposit

• Step 6: Cross-check all the details and go ahead with the payment option. Complete the payment via net banking to start your fixed deposit account

• Step 7: Download the receipt and take a printout of it for future reference

How to open an FD account Offline?

Even if you do not have an existing account, you can easily start a fixed deposit by visiting the branch of the desired bank or NBFC. The process is almost similar in every bank or NBFC. Here is a look at how to open an FD account offline.

• Step 1: Visit the nearest branch of your convenience

• Step 2: If you already have an account, you just need to fill the application form for a fixed deposit and submit it

• Step 3: If you do not have an existing account, you will have to provide KYC documents like identity proof, address proof and other supporting documents along with the FD application form

Bajaj Finance Fixed Deposit

You can easily start a fixed deposit account with Bajaj Finance anytime with the help of a simple and hassle-free online application procedure. The FD interest rates offered by Bajaj Finance FD can go up to 8.10%. With a minimum deposit amount of ₹15,000 and a flexible tenor ranging from 12 to 60 months, you can start growing your money and enjoy great liquidity. With high credibility and stability ratings and facilities like loan against fixed deposit, Bajaj Finance FD is your ideal option to start a fixed deposit.