When it comes to investing your money, there are several options available, with fixed deposits and term deposits being two of the most popular choices. While both these investment options have similar features, there are significant differences between them that you should know before making an investment decision. In this article, we will compare term deposit vs fixed deposit and help you understand which option is best for you.
What is the Meaning of Term Deposit?
A term deposit, also known as a time deposit, is a type of investment where you deposit your funds for a specific period, ranging from one month to five years. When you invest in a term deposit, you agree to leave the funds in the account for the entire term, without making any withdrawals or additional deposits. Term deposits usually offer a fixed interest rate and the return on investment is guaranteed.
Characteristics of Term Deposit
The following are some of the main characteristics of term deposits:
- Fixed tenure: Term deposits have a fixed tenure, and you cannot withdraw the funds before the maturity date.
- Fixed interest rate: The interest rate offered on term deposits is usually fixed, and the return on investment is guaranteed.
- Low-risk investment option: Term deposits are a low-risk investment option, making it an ideal choice for risk-averse investors.
What is the Meaning of a Fixed Deposit?
A fixed deposit, also known as a term deposit, is a type of investment where you deposit your funds for a fixed period, ranging from a year to 5 years. The amount you deposit and the tenure are fixed at the time of investment. Fixed deposits usually offer a fixed interest rate and the return on investment is predictable.
Characteristics of the Fixed Deposits
The following are some of the main characteristics of fixed deposits:
- Fixed amount and tenure: The amount and tenure of fixed deposits are fixed at the time of investment. You can make premature withdrawals but also attract early withdrawal penalties.
- Fixed interest rate: The interest rate offered on fixed deposits is usually fixed, and the return on investment is guaranteed.
- Low-risk investment option: Fixed deposits are a low-risk investment option, making it an ideal choice for risk-averse investors.
How to Invest in a Bajaj Finance Fixed Deposit?
To invest in a Bajaj Finance Fixed Deposit, you need to follow the below steps:
- Visit our Investment section and choose Fixed Deposit from the options.
- Click on ‘Open FD' at the top of the fixed deposit page to open our online application form.
- Enter your 10-digit mobile number and verify the OTP sent to your phone.
- Fill in the investment amount, choose the investment tenure and the payout frequency. Enter your PAN card and date of birth.
- Complete your KYC: If you are an existing customer, confirm the details available with us, or edit to make any changes. For new customers, complete your KYC using Aadhaar.
- A declaration will be displayed. Please read it carefully and agree to the terms and conditions. Enter your bank details and proceed to pay.
- Complete your investment using NetBanking/ UPI or NEFT/ RTGS.
In conclusion, both term deposits and fixed deposits are safe and secure investment options, suitable for risk-averse investors.