A fixed deposit is a financial instrument that is offered by various finance companies and banks in India. You can invest a lump sum amount in an FD for a fixed period to earn substantial returns upon tenor completion.
Apart from being a flexible and safe investment option, a fixed deposit also provides attractive returns. As you don’t need a huge corpus to start an FD investment, you can use it to create wealth from a young age. Here are some of the top reasons that make it the best investment alternative for you:
Safe from market uncertainties
As the market is rife with uncertainties, see to it that you park your money in only safe instruments. While instruments like mutual funds and equities are linked directly to the market, a fixed deposit plan provides assured returns as it does not rely on market situations. Therefore, you can invest in an FD without worrying about the safety of your invested capital.
The returns offered by fixed deposits are much better than savings accounts and RDs. Their fixed deposit interest rates are even better than some other fixed income instruments like post office FDs. However, bank FD rates have fallen considerably this year.
To earn better returns, you can invest in a corporate FD that is offering a higher rate of interest. The FD interest rate of 6.85% provided by Bajaj Finance FD is the highest in the market as of now. To analyze the kind of returns its FD plans provide, you can use the fixed deposit calculator that is integrated into its official website.
Easy withdrawal norms
You can withdraw your deposits even before maturity once your FD completes a minimum tenor as decided by the particular bank or finance firm chosen by you. The procedure of withdrawing an FD early is quite simple but you might have to pay a penalty fee that is usually a percentage of your interest earnings.
Bajaj Finance offers a loan of up to 75% of your FD value. It means that you don’t have to think about premature withdrawals anymore. Also, as no other collateral is required to apply for this loan, your FD proves to be a convenient credit source.
Choice of periodic interest payouts
Fixed deposits provide the flexibility of choosing how you want to receive your interest earnings. For receiving interest periodically, you can invest in a non-cumulative FD. If you don’t need the interest payouts to handle your regular expenses, you can invest in a cumulative FD.
For instance, Bajaj Finance FD gives you the option of choosing between monthly, quarterly, bi-annual, and annual payouts as per your financial needs. Or else, you can invest in a cumulative FD that pays the accumulated interest at maturity.
Seamless investment procedure
Many banks and financial institutions are offering an online FD form these days. Some finance firms like Bajaj Finance have gone a step ahead to provide a complete online procedure from start to finish.
With this online procedure, you can even get your documents verified online via a cKYC process. This provision will come in handy as you don’t have to step outside or wait in long queues for opening an FD account. Also, a 0.10% additional FD rate is provided for selecting the online investment procedure.
Flexible investment options
You get the option of selecting an FD tenor and FD type as per your financial goals. Apart from that, you also get the choice of renewing an FD at maturity or you can also withdraw the interest earnings accrued.
Bajaj Finance offers a provision called a multi-deposit facility using which you can deposit in multiple FD types and plans at once. It allows you to choose a tenor between 12 and 60 months for each deposit and you only need to submit one cheque to invest in several FDs at once.
By using this provision, you can avoid investing all of your savings in a single FD, and laddering deposits also becomes easy. You get multiple liquidity points that will come in handy in times of need. Moreover, its FD plans are safe as ICRA and CRISIL have rated it highly for securing the money of its depositors.
Instead of going for market-linked instruments, you can invest in an FD that offers higher returns along with the stability of the invested amount. FDs not only provide higher returns but also allow you to select the frequency of interest payouts. You can choose to receive the accumulated interest at maturity by investing in a cumulative FD. Bajaj Finance offers a loan against your FD that can be used to cover your sudden expenses. The interest rate of 6.85% offered by it is the highest FD rate in the market currently. Its multi-deposit facility enables you to ladder your deposits conveniently and allows you to deposit in FDs as per your investment ideas. The flexibility of choosing the tenor and the option make it one of the best investment options for you.