Types of fixed income products
Here’s a quick look at common fixed income instruments:
- Government Bonds: Issued by the central government and considered low-risk. They are good for those seeking safety but willing to accept modest returns.
- Corporate Bonds: Offered by private companies. They generally offer higher returns than government bonds but come with slightly higher risk.
- Fixed Deposits (FDs): Offered by banks and NBFCs like Bajaj Finance, FDs are one of the most popular and safest fixed income products in India.
- Debentures: These are unsecured loans issued by companies to investors. While they can yield good returns, they lack the collateral security of bonds.
- Treasury Bills (T-Bills):Treasury Bills are short-term debt instruments issued by the government, typically with maturities of up to one year. They are sold at a discount and redeemed at face value, making them low-risk options ideal for investors seeking safe and liquid short-term investments.
- Recurring Deposits (RDs): Recurring Deposits allow investors to deposit a fixed amount regularly and earn a predetermined interest rate over a chosen tenure. They are suitable for disciplined savings, offering stable returns with low risk, especially for individuals looking to build a corpus gradually.
- Government Securities (G-Secs): Government Securities are long-term debt instruments issued by the government with fixed or floating interest rates. Backed by sovereign guarantee, they are considered highly secure and are commonly preferred by conservative investors seeking stable and predictable returns over time.
Want steady returns without market risks?
With a Bajaj Finance Fixed Deposit, you get up to 7.75% p.a. interest, along with flexible tenures and payout options. Open FD.
How does Fixed Income work?
- You lend money to an issuer
Fixed income investments work like a loan. You invest money in a government or company, and in return, they promise to repay the amount after a fixed period. - You earn regular interest (coupon payments)
The issuer pays you a fixed interest at regular intervals (monthly, quarterly, or annually). This predictable income is what makes fixed income instruments attractive for stability. - Principal is returned at maturity
At the end of the investment tenure (maturity date), the original invested amount (principal) is returned to you along with the final interest payment. - Returns are pre-defined and stable
Since the interest rate is fixed at the time of investment, returns are largely unaffected by short-term market fluctuations, making them reliable for planning future income. - Can be held or sold before maturity
Some fixed income instruments like bonds can be sold in the market before maturity. However, their price may fluctuate depending on interest rate changes and market conditions.
Why consider fixed income investments?
1. Stable & Predictable Returns
Unlike equity or mutual funds, fixed income products tell you upfront how much you will earn. That is ideal for goal-based investing, especially if you are planning for education, retirement, or a major expense.
2. Lower Risk
Most fixed income products have low exposure to market fluctuations. Instruments like Bajaj Finance Fixed Deposits are rated AAA/STABLE by CRISIL and ICRA—signifying high safety.
3. Customisation & Flexibility
You can choose tenures that align with your financial goals. For example, FDs range from 12 to 60 months and come with payout frequencies that can match your cash flow needs—monthly, quarterly, half-yearly, or annually.
4. Higher Returns than Savings Accounts
Compared to savings bank interest (which hovers around 3–4%), fixed income tools like FDs can deliver much better returns, especially if you lock in for a longer tenure.
Thinking short-term or long-term?
Choose tenures from 12 to 60 months with Bajaj Finance FDs. Your money grows at your pace. Check FD Rates.
Also Read: What is Exempt Income
Investing in fixed income through fixed deposits
Among all fixed income products, Fixed Deposits remain the top pick for many Indian investors. They’re easy to understand, accessible online, and provide guaranteed returns.
With a Bajaj Finance FD, you can invest as little as Rs. 15,000 and enjoy these benefits:
- Flexible payout options
- High interest rates of up to 7.75% p.a. for senior citizens
- Online booking and paperless KYC
- Auto-renewal options to keep your money compounding
Retired or planning for retirement?
Senior citizens earn higher interest rates of up to 0.35% p.a. with Bajaj Finance FDs—perfect for supplementing your monthly income. Open FD Account.
Also Read: Best Passive Income Ideas to Make Money
