A fixed deposit is a safe and reliable investment option for those seeking steady returns with minimal risk. By investing a sum like Rs. 4 lakh FD for a fixed tenure, you earn interest at a predetermined rate that remains unchanged, ensuring a stable and predictable income throughout the investment period.
Types of Fixed deposit
Cumulative FD
In a cumulative FD, the interest earned on the deposit is reinvested with the principal amount for the entire tenure. The total interest is paid out to the investor at maturity. Cumulative FDs often offer higher interest rates, as the interest is compounded and reinvested, which gives investors higher returns.Non-cumulative FD
Non-cumulative FDs operate differently. Here, the interest earned is paid out at regular intervals, such as monthly, quarterly, half-yearly, or annually, based on the investor's preference. This type suits those seeking a regular income stream, providing liquidity and immediate returns. The interest payouts offer flexibility, making it ideal for individuals with specific financial goals or regular income requirements.
NBFC's like Bajaj Finance offer both cumulative and non-cumulative FD, with one of the highest interest rate up to 7.30% p.a.
Here the table showing how much interest you can earn if you invest Rs. 4 lakh in Bajaj Finance FD:
Cumulative FD |
Investor category |
FD amount |
Investment tenure |
Applicable interest rate for cumulative interest |
Total interest payout at maturity |
Customers below 60 years |
Rs. 4 lakh |
60 months |
6.95% p.a. |
Rs. 1,59,711 |
|
Senior citizens |
Rs. 4 lakh |
60 months |
7.30% p.a. |
Rs. 1,68,930 |
|
Investor category |
FD amount |
Investment tenure |
Applicable interest rate for cumulative interest |
Total interest payout at maturity |
Customers below 60 years |
Rs. 4 lakh |
60 months |
6.74% p.a. |
Rs. 1,34,800 |
|
Senior citizens |
Rs. 4 lakh |
60 months |
7.07% p.a. |
Rs. 1,41,400 |