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Know About 7 Things Before Investing in Fixed Deposit

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As humans, it is a rather common practice for us to delay doing something. Until we know almost everything about it. When it comes to investing too, we want to have all the knowledge. Before putting our money where our mouth is. Today we will understand some important facts about FDs. Which will explain why Fixed Deposit are the most preferred option by the average Indian earning individual. 

The risk-return-traditional approach

Other alternatives to Fixed Deposits are government schemes like National Pension, Senior Citizen Savings etc. While they offer great security thereby minimising risks and are traditional. They offer less than or almost the same average returns. On the other end, there is the stock market. That offers great returns but has considerable number of risks and isn’t very institutionalised. Fixed Deposits emerge as the best option here because they offer all the three- negligible risk. Greater than average returns and are institutionalised. 

Tax-Saving

The tax benefit of the FDs by Bajaj involves certain legalities. These specify that income from fixed deposits is taxable. As under the head ‘income from other sources.’ The interest income that doesn’t exceed Rs 10,000 is not taxable. Under Section 80-C of the Income Tax Act, amounts invested in a tax-saving FD are exempt. You can exempt up to Rs 1,50,000 per year. These FDs usually have a lock-in period of 5 years.

Online Calculator

A few simple steps are to be followed to check the FD maturity amount. Firstly, go to the FD calculator and choose the type of customer you are. Then put in the FD type (cumulative or non-cumulative) and the amount of your principal and the tenor. The final amount of interest and your total amount earned at maturity will be displayed on the screen.  When you use Bajaj Finance Fixed Deposit calculator. There is an option that appears to choose from cumulative and non-cumulative pay-out options. These two options determine your interest rate and maturity value.

Interest Rates

THE AVERAGE FD RATE IN INDIA IS 5.5%. As of July 2021, the average fixed deposit interest rates offered for tenures ranging from 7 days to 10 years. For deposits below Rs. 2 crores of major financial institutions, like YES Bank, is 6%. Among the reputed corporate fixed deposits, the average rate of return range is from 4.5-5.75%. Post Office FDs offer more lucrative rates than banks. In fact, FDs for shorter time periods like less than 6 months. These have rates calculated on Simple Interest basis taking into account number of days.  However, a corporate FD does a lot better than all of these. Bajaj Finance Fixed Deposit (FD) is a great example, for the same. Because it provides a general rate of 6.50% subject to further rises with certain specific conditions. Thus, a bajaj investment always emerges as the best one especially among the best FD schemes. 

NRIs and Senior Citizens

Bajaj FDs value and understand their senior citizen account holders. Thus, along with a higher interest rate of 7.05 % they can also avail periodic pay-outs. For funding general expenses that arise at their age. For Non-Residential Indians (NRIs), and others like them with an NRO account. They can make a choice between tenors of 12 and 36 months. The interest rates are the same for them including the additional benefits given to Senior Citizens. 

Renewals and Loan facilities

The very possibility of breaking an FD is what deters most people from opting for it in the first place. Therefore, at Bajaj depositors are allowed to take a loan against the FD (post the initial lock-in period of 3 months). When they need to make emergency withdrawals. The only condition is that the loan value cannot exceed 75% of the FD value. 

The general perception about auto renewals is a sense of hesitation and suspicion. However, Bajaj gives you the option to opt for an auto-renewal. To save you the time and effort of manually filling the renewal forms repeatedly. It is completely voluntary and you’re still in control. The only thing that is eliminated is a waste of time and effort on your end.

Application Process and Tenors

At Bajaj, the application prevents you the hassle of page long documents and even longer queues. It allows you to browse the best rates from the safety of your homes while completing the entire process digitally. By having a wide range of tenors between 12 and 60 months, you can plan your finances. And generate higher liquidity according to your requirements. 

Hence, these 7 facts establish and in fact clarify all concerns related to Fixed Deposits.

read more:- How to Choose the Finance Agreement That Works for Your Budget

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Thursday, 07th July 2022
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