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Should You Renew Your FD

  • Highlights

  • Always consider the rateof interest you are likely to get

  • Compare rates with other lenders for the same investment

  • Think about your financial priorities and goals

A fixed deposit can help you maximise your savings and create wealth for your future. But, when you have anon-going FD and the maturity date is near, you might find yourself confused about whether you should renew the fixed deposit or not. If you’re having a tough time choosing one option, pay attention to these factors to get more clarity.

What is the interest rate that youwill get on renewal?

Before you decide to renew your FD, it is important to see if you are eligible to get a better interest rate with your existing FD provider. While considering the interest rate, be sure to compare it to the rate of inflation to understand your net benefit. If you aren’t getting a good interest rate, it makes better sense to let your FD mature and use the funds to invest in an FD with another company or to make a different investment.
Bajaj Finance offers interest rates on FDs of up to 7.85%. If you are a senior citizen, this rate is even higher, and stands at 8.20%. However, if you have an FD with Bajaj Finserv already, you can enjoy an additional 0.25% as interest when you renew your investment.

What do the market trends indicate?

Market conditions change from time to time and these factors impact your FD’s interest rate and your investments in general. For example, in a situation when the economy is going through recession, it is best to renew your fixed deposit instead of withdrawing it post maturity. This is because the market is likely to be extremely volatile, which increases the risk that your investment is exposed to. Therefore, in such a situation, continuing your fixed deposit will offer you the best returns. A one-size-fits-all approach won’t work here, so study the condition of the market before making a decision.

What is the nature of your investment portfolio and your current financial priorities?

When your FD is nearing maturity, take some time to revisit your Investment portfolio. Examine your risk appetite and your financial priorities. For example, if you are in your thirties and your goal is to benefit from higher gains offered by instruments traded on the market, renewing FDs might not be a priority for you at the moment. However, if you are in your fifties and are closer to retirement,

it could be the time to choose low-risk investment options to plan for post-retirement life. In this case, renewing yourfixed deposit may be more beneficial.

How to invest in Bajaj Finance Fixed Deposit

What are your immediate needs for finance?

Another way to evaluate renewal is to consider your immediate needs for finance. For example, if you have to pay for a wedding in the family or repay a debt, withdrawing your FD when it matures and using the funds towards this will serve as a wise move. However, if you have no pressing need for funds and have stable cash reserves to take care of any financial obligations that may crop up, you couldrenew your FD.

Carefully examine these factors and only then take the decision to renew your FD or not. If you are renewing your fixed deposit, choose a provider that offers flexibility and superior benefits such asBajaj Finance.

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