FD or SDP: Which investment option suits your financial goals best

Know how these basic FD variants differ in order to make the best investment choice.
Fixed Deposit
3 mins
01 April 2024

Fixed deposits (FDs) are an excellent savings tool that provides a profitable rate of return and ensures the safety of your principal amount. But when it comes to choosing between cumulative and non-cumulative FDs, you need to understand the difference between the two. 

What are cumulative and non-cumulative FDs?

Cumulative FD: In case of a cumulative FD, you earn interest on the deposited amount, which is accumulated and paid out along with the principal amount at maturity. This means you receive the entire interest on the maturity date. 

Non-cumulative FDs: In case of a non-cumulative FD, the interest earned on the deposited amount is paid out at regular intervals, which can be monthly, quarterly, half-yearly, or yearly. In this case, the interest you earn is paid as per the deposit term and the frequency chosen, while the principal amount is paid at maturity.

Here are some of the advantages of each type. 

Benefits of cumulative FDs

  1. Higher interest rate: Cumulative FDs usually have a higher interest rate than non-cumulative FDs. 
  2. Greater return: As the interest is compounded over the tenure, you earn a greater return at maturity. 
  3. Higher liquidity: Cumulative FDs are ideal for long-term goals and they encourage disciplined savings. 

Benefits of non-cumulative FDs

  1. Regular income: Non-cumulative FDs offer periodic pay-outs, making them suitable for individuals who require regular income. 
  2. Flexibility: You can choose the frequency of interest pay-out as per your requirement. 
  3. Better tax savings: Non-cumulative FDs can be beneficial for tax savings, as the returns are spread out across different financial years.  

At Bajaj Finance, you can choose between both cumulative and non-cumulative FDs, with tenures ranging from 12 months to 60 months. Our FDs offer attractive interest rates and additional benefits such as flexible interest pay-out options, online account management and easy renewal options. With high credit rating and assured returns, you can be assured of a safe and secure investment with Bajaj Finance Fixed Deposit. Invest in our fixed deposit and watch your money grow with ease. 


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