Types of FD
- Cumulative FD
In cumulative FD, the interest earned on the deposit is reinvested along with the principal amount for the entire tenure of the deposit. The interest is compounded annually and paid at maturity. The investor gets back the principal amount plus the interest earned over the entire tenure of the investment.
- Non-cumulative FD
It is a type of FD where the interest earned on the principal amount is paid out at regular intervals, such as monthly, quarterly, half-yearly, or annually. Non-cumulative FDs are suitable for individuals who prefer regular income over the course of the tenure. The interest rate for non-cumulative FDs is generally lower compared to cumulative FDs.
How much interest can you earn on a Rs. 3 crore FD
Financial institutions like Bajaj Finance offer different tenures on their FD like monthly, quarterly, half yearly, annually and at maturity. Let us take an example, how much interest you can earn if you invest Rs. 3 crore in Bajaj Finance FD
Payout frequency
|
FD rates (p.a.)
|
Interest earned
|
Monthly
|
7.81%
|
Rs. 1,16,55,000
|
Quarterly
|
7.87%
|
Rs. 1,17,45,000
|
Half Yearly
|
7.94%
|
Rs. 1,18,35,000
|
Annual
|
8.10%
|
Rs. 1,20,75,000
|
At Maturity
|
8.10%
|
Rs. 1,41,81,973
|
Things to consider when investing in Rs. 3 crore FD
- Interest rates
Compare interest rates offered by various financial institutions. A small difference in interest rates can significantly impact your return on investment.
- Type of FD
Decide between cumulative and non-cumulative FDs. Cumulative FDs accumulate interest, providing a lump sum at maturity, while non-cumulative FDs offer regular payouts, catering to different income needs. Select one that align with your financial goals.
- Tenure
Choose the FD tenure wisely. Longer tenures often come with higher interest rates but may limit liquidity. Consider your financial goals and liquidity requirements before committing to a specific tenure.
- Tax implications
Understand the tax implications of the interest earned. Interest income from an FD is generally taxable. If your interest earned from your FD goes beyond Rs. 40,000 (in case of senior citizen the limit is Rs. 50,000) then you will be charged 10% TDS. Consider the impact of taxation on your overall returns.
- Financial institution's credibility
Choose a reputable and secure financial institution. Make sure the institution through which you are investing is reliable and financially stable to keep your amount safe. Bajaj Finance FDs are rated “AAA” from the rating agencies like CRISI and ICRA, which is the highest standard of safety in India.
- Inflation
Factor in inflation when evaluating your FD returns. While FDs offer stability, it is important to consider how inflation may impact the purchasing power of your returns over time.
Calculating monthly interest on FD
Amount
|
Interest rate (p.a.)
|
Interest per month
|
Rs. 3 crore
|
6%
|
Rs. 1,50,000.00
|
Rs. 3 crore
|
6.50%
|
Rs. 1,62,500.00
|
Rs. 3 crore
|
7%
|
Rs. 1,75,000.00
|
Rs. 3 crore
|
7.50%
|
Rs. 1,87,500.00
|
Rs. 3 crore
|
8%
|
Rs. 2,00,000.00
|
Rs. 3 crore
|
8.50%
|
Rs. 2,12,500.00
|
Rs. 3 crore
|
9%
|
Rs. 2,25,000.00
|
Rs. 3 crore
|
9.50%
|
Rs. 2,37,500.00
|
Rs. 3 crore
|
10.00%
|
Rs. 2,50,000.00
|
What is Bajaj Finance Digital FD?
Bajaj Finance recently introduced the "Bajaj Finance Digital FD," a new fixed deposit type with a 42 months tenure. Bajaj Finance is offering one of the highest interest rates of up to 8.65% p.a. for senior citizens and for the customers below the age of 60 they are providing up to 8.40% p.a. This Digital FD is exclusively available on Bajaj Finserv website or app.
Conclusion
Investing in FD is a safe and reliable option for investors who seek decent returns on their investment with minimal risk. A large sum like Rs. 3 crore can fetch a higher amount of interest, providing a good source of earnings. However, investors should compare the interest rates offered by different financial institutions before investing.
