Fixed deposits are instruments through which you earn interest by depositing a lump-sum amount with a financial institution for a selected tenor. The rate of interest you get on an FD is generally higher than what you earn on a savings deposit.
Additionally, stable returns make this savings tool much safer than investing in market-linked options. If you have surplus funds that you want to invest securely and risk-freely, you can go with FDs offering high interest rates.
Read on to learn about how to earn more from a fixed deposit and make the most of your savings.
While a fixed deposit itself guarantees stable returns over its tenor, there are several ways in which you can earn more lucrative returns. Here are the steps on how you can get the maximum benefit from booking a fixed deposit:
Opening a fixed deposit online allows you to browse multiple options and choose the issuer offering the highest interest rates. Higher interest rates translate into higher returns.
Additionally, you can also see how the interest rates vary for different deposit amounts and tenors. By comparing all these options online, you can plan your investment to maximise your returns.
While a non-cumulative fixed deposit ensures regular payouts, a cumulative fixed deposit ensures a bigger payout upon maturity.
With a cumulative fixed deposit, you can build a bigger corpus since the interest earnings are reinvested along with your principal. In other words, you get the benefit of compounding, which increases your earnings.
In fixed deposits, your deposit amount stays with the financial institution for a fixed tenor. Withdrawing from your fixed deposit before the tenor ends can result in a penalty levied by the institution.
This will deplete the amount you stand to earn at the end of the tenor of your fixed deposit. It will also prevent you from earning optimal returns on your deposit. To earn the most out of your deposit, stay locked-in for the tenor.
If your parents are senior citizens, you can start a fixed deposit in their name and earn higher interest rates. Most banks and NBFCs offer a higher rate to senior citizens as compared to regular citizens.
Booking a senior citizen FD on Bajaj Markets allows you to enjoy interest rate hikes of up to 0.25% as compared to base rates.
There are several kinds of fixed deposits available to depositors. While some allow for tax savings, others do not. So, thoroughly browse through the options available to you before you book a fixed deposit.
Try to pick a fixed deposit that earns you the highest tax-saving benefits. However, remember that tax-saving FDs have a lock-in period of 5 years. Also, compare the returns of a tax-saver FD with a regular FD to secure the best returns.
Different financial institutions offer fixed deposits at varied rates of interest depending on the tenor. So, when choosing a lender and preferable tenor, look for where you can earn higher returns.
Sometimes, FD issuers have special tenors that come with a higher interest rate. Signing up for these can also help you augment your earnings.
To determine your returns and compare them based on different FD interest rates, you can use an FD calculator. Based on the results, you can choose a lender that offers the best returns.
Parking your funds in more than one fixed deposit pays in different ways. The benefits of adopting the practice of laddering include the following:
It lets you enjoy varying interest rates at different times
It acts as a safety net helping you diversify a risky portfolio focused on market-linked investments
It helps in reducing your tax liabilities
With varying maturity periods, you can enjoy better liquidity
There are several benefits of FDs for account holders, such as the following.
Unlike with instruments such as equity stocks, fixed deposits ensures stable returns. The returns on fixed deposits are guaranteed by the bank which you open your fixed deposit account.
Even if the bank goes into liquidation or goes bankrupt, you can rest assured that you will receive your funds (subject to a limit of ₹5 Lakhs). This is due to the insurance cover offered by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
To ensure you receive assured earnings on company FDs, simply check their credit ratings. With the highest rating by ICRA or CRISIL, these FDs are instruments you can rely on.
You can easily achieve your short-, medium-, and long-term financial goals by booking a fixed deposit. This is because the tenor offered on FD accounts can range from 7 days to 10 years.
Being a risk-free instrument, FDs help you meet varying goals, no matter the horizon.
Many banks and lenders provide loans against fixed deposits you have with their institution or elsewhere as well. The fixed deposit acts as collateral for the sum that you borrow. This makes it easy for you to meet any emergency financial requirements.
While everybody knows that savings are essential, not everybody can save as much as they should. However, a fixed deposit ensures savings since a lump sum amount is dep an attractive interest rate for a fixed tenor.
Moreover, many issuers even offer FDs on a periodic basis. Here, instead of a lump-sum amount, you deposit a smaller amount at predetermined intervals.
Starting a fixed deposit account on Bajaj Markets is easy and open to all Indian citizens residing in the country. In fact, a Hindu Undivided Family, sole proprietors, partnership firms, companies, clubs, societies, associations, and family trusts can also consider an FD.
The only documents required include your latest photograph and KYC documents. While this sounds simple enough, opening the fixed deposit is easier still as it can be done in a few simple steps on Bajaj Markets.
Here is how you can start your FD journey and secure your future today!
Step 1: Enter your mobile number and date of birth and verify the OTP to continue
Step 2: Fill in the deposit amount, the tenor, and the interest payout type, as well as your bank account details
Step 3: If you are an existing customer, just need the nominee details to continue
Step 4: If you are a new customer, complete your KYC by submitting your PAN or Aadhaar details or by simply uploading the documents required
Step 5: Make the payment for your initial deposit using internet banking/UPI; the latter is not available if you are depositing over ₹1 Lakh
Step 6: Once the payment is successful, your deposit will be created
An acknowledgement for successfully opening the FD account will be sent to your mobile number and your email ID. After this, you can keep track of your returns from anywhere at any time via the issuer’s app.
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Most banks and NBFCs offer a higher interest rate of up to 0.50% on FDs for senior citizens.
The tenor of an FD generally ranges between 7 days to 10 years.
As the interest is added to your principal amount in a cumulative FD, you can earn higher returns on it as compared to a non-cumulative FD. In simpler words, the interest gets compounded when you choose a cumulative FD.
If you withdraw your deposits prematurely from your FD, you will not be able to earn the maximum level of interest. Moreover, you may also have to pay a penalty charge to the issuing bank or NBFC.