Fixed deposits are a popular investment option for those looking for a low-risk, stable return on their investment. Among the different types of fixed deposits, cumulative fixed deposit is a unique one. A cumulative fixed deposit is a type of fixed deposit in which the interest earned on the principal amount is compounded and paid along with the principal amount at the time of maturity. This means that the interest earned each year is not paid out separately but added to the principal amount. The total interest earned is then paid out at the time of maturity.
How to maximise returns with cumulative fixed deposits?
To maximise returns, it is essential to choose the right financial institution. You should look at the interest rates offered by different financial institutions and choose the one with the higher interest rate and the highest safety. This is where Bajaj Finance outperforms. With our higher interest rates and [ICRA]AAA(Stable) and CRISIL AAA/STABLE ratings, your investment will grow timely and securely. However, you should choose a tenure that suits your investment goals. Longer tenures generally offer higher interest rates. And with Bajaj Finance Fixed Deposit, senior citizens can earn an extra 0.25% interest rate on the current rate. Our online FD interest calculator helps you in calculating the interest rate, which can be earned on your investment after choosing the preferred tenure.
Difference Between Cumulative and Non-Cumulative FD
The main difference between cumulative and non-cumulative fixed deposits is in the payment of interest. In a cumulative fixed deposit, the interest earned is compounded annually and paid out at the time of maturity. In non-cumulative fixed deposits, the interest earned is paid out at regular intervals, such as monthly, quarterly, or semi-annually. Non-cumulative fixed deposit is suitable for those who require regular income from their investment.
So the question is, where to invest?
Cumulative or non-cumulative fixed deposit? The choice between cumulative and non-cumulative fixed deposits depends on the investment goals. A cumulative fixed deposit is suitable for those looking for a long-term investment, as it offers a higher return at the time of maturity. Non-cumulative fixed deposit is suitable for those who require regular income from their investment.
A cumulative deposit does not pay out regular interest, it is appropriate for someone who does not rely on interest income. Individuals with steady earnings, paid professions, or business owners can create a cumulative deposit account. Regardless of the interest payment made at maturity, they can also determine the interest-earning period.
A cumulative fixed deposit is a type of fixed deposit that compounds the interest earned on the principal amount and pays out the total interest at the time of maturity. Individuals who want to save for a specific purpose might open a cumulative fixed deposit account. A non-cumulative account, on the other hand, is appropriate for people who want to make a consistent income from their extra cash. Finally, selecting a specific deposit account that meets your financial needs is critical. Open a Bajaj Finance Fixed Deposit now and take a step towards creating an optimum financial goal for your future needs.
