Overview of fixed deposits
Aspect
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Details
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Fixed Deposits (FDs)
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Fixed Deposits are savings where you lock in a certain amount for a specific period to earn interest.
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Providers
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All Banks and NBFCs
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Opening method
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Available both online and offline
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Risk level
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Secure, regulated by RBI
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Types of fixed deposits
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Standard, tax savings, special, corporate, regular, senior citizen, flexi
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FDs for NRIs?
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Yes, available as NRE (Non-resident External) and NRO (Non-resident Ordinary) accounts
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Premature withdrawal
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Allowed, typically with an interest penalty
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Different Types of Fixed Deposit
Addressing the popular fixed deposit account types offered in India, financial institutions offer several kinds of fixed deposit plans. Let us take a quick look at different types of fixed deposits:
1. Cumulative Fixed Deposit
This FD is a subset of a traditional fixed deposit in which interest is paid out upon maturity. The investment amount is increased by the interest that was accrued over the preceding month or interest period. You may increase your earnings thanks to the power of compound interest.
2. Non-Cumulative Fixed Deposit
This is a subset of a conventional fixed deposit, much like a cumulative FD is. However, this FD is excellent if you want to receive regular income because interest is paid out on a monthly, quarterly, half-yearly, or annual basis. The maturity amount is consequently less than that of a cumulative FD.
3. Tax Saver Fixed Deposit
As the name implies, you can take a tax deduction of up to Rs. 1.5 lakh in a financial year with this fixed deposit, which helps you save money on taxes. In this case, you must invest a one-time lump sum for a five-year lock-in period.
4. Bank FDs
A bank FD is a specific kind of fixed deposit in which you make a one-time lump sum deposit into a bank for a predetermined time. Depending on the interest rate in effect when you book your FD, your deposit will accrue interest.
5. Company FDs
Another well-liked FD alternative is company FDs, commonly referred to as corporate FDs. Any fixed deposit that is provided by financial institutions and NBFCs is referred to as a company FD.
It is essential that you evaluate CRISIL, ICRA, and other credit ratings when saving with firm FDs. They show you the degree of safety you can have. Company FDs frequently provide variable tenors and more affordable rates of return.
6. Post Office FD
One of the safest savings options on the Indian market is the post office fixed deposit, sometimes referred to as the post office term deposit. Indian Postal Service is the one who issues it. It is also supported by the sovereign guarantee of the Indian government.
7. Flexi Fixed Deposit
This fixed deposit gives you the advantages of both a traditional FD and a demand deposit. Your investment in this is connected to the issuer's savings accounts. It provides better interest rates along with a savings account's liquidity.
8. Regular Income Fixed Deposits
Ideal for individuals with limited income who rely on interest earnings to manage monthly expenses, this type of fixed deposit provides consistent returns. You can choose to receive interest payouts on a monthly or quarterly basis, ensuring a steady flow of income.
Types of Fixed Deposits for NRIs
There are two types of fixed deposit accounts for Non-resident Indians: Non-resident External (NRE) and Non-resident Ordinary (NRO) accounts.
1. Non-resident External (NRE) fixed deposits
These accounts are best suited for NRIs who earn in foreign currency and want to convert it to Indian currency. The interest earned on the deposit is tax-free and one can get both principal and the interest amount. However, the money deposited can be affected by currency rate fluctuations.
2. Non-resident Ordinary (NRO) fixed deposits
These accounts allow deposits in foreign or Indian currency. The interest income earned on NRO fixed deposits is taxable at 30% based on the Income Tax Act, 1961. Unlike NRE FDs, there are no risks for exchange rate fluctuation. Investors can completely repatriate the interest earned and the principal amount within a certain bracket or set limit.
Types of Bajaj Finance fixed deposit (FDs) available
Bajaj Finance Fixed Deposit enjoys a [ICRA]AAA(Stable), indicating the highest level of safety and lowest investment risk. BFL FDs have also a rating of CRISIL AAA/ STABLE, which is another reason to invest. You can invest Rs. 15,000 to Rs. 3 crore- in our FD and earn competitive returns of up to 7.30% p.a. Mentioned below are some of the different type of FDs that Bajaj Finance offers to suit your convenience and investment needs.
1. Fixed deposit for customers below the age of 60
All investors below the age of 60 can apply for a fixed deposit and earn returns up to 6.95% p.a. Some of the key features of this are:
- Interest ranges from 6.41% p.a. to 6.95% p.a.
- Choose investment amount from Rs. 15,000 to Rs. 3 crore
- You can choose a tenure of 12 to 60 months
- Minors can apply for fixed deposit with the help of a guardian
- You can choose flexible payout option for interest payment on monthly, quarterly, half-yearly, or yearly basis
- End-to-end online application process
2. Fixed deposit for senior citizens
Customers above 60 years of age, can also apply for a fixed deposit and earn returns up to 7.30% p.a. Some of the key features include:
- Interest rate from 6.74% p.a. to 7.30% p.a.
- Additional rate benefits of up to 0.35% p.a. for senior citizens
- Get regular income after retirement on monthly, quarterly, half-yearly, or yearly basis, with flexible payout option.
- Invest from the comfort of your home, with an end-to-end online application process.
3. Fixed deposit for NRIs
All Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) with Non- Resident Ordinary Account (NRO) accounts can also apply for a fixed deposit with Bajaj Finance offline. You can get in touch with our customer care executives to apply.
- Deposit an amount for a fixed tenure and earn at up to 7.30% p.a.
- Tenure ranges from 12 months to 36 months
- Payment is accepted only through cheque or RTGS/ NEFT from an NRO bank account
- You can choose flexible payout option for interest payment on monthly, quarterly, half-yearly or yearly basis
Benefits of fixed deposit
Investors looking to invest in fixed deposit can get following benefits:
1. Profitable returns
The fixed deposit interest rate is fixed at the time of investment. So, the returns are predictable and can be determined using the FD calculator.
2. Safety
Fixed deposits are considered a low-risk investment option, as they are typically offered by banks and other financial institutions that are insured by the government. You can check the ratings of different fixed deposits to ensure security and safety of your deposit.
3. Flexibility
Fixed deposits typically offer a range of tenures, allowing investors to choose the term that best suits their needs.
4. Liquidity
Most fixed deposits can be easily liquidated before maturity, although there may be a penalty for early withdrawal.
5. Higher interest rate
Fixed deposit generally offers higher interest rate compared to savings account.
Who offers FD?
Fixed deposits are offered by banks, non-banking financial institutions and post offices. If you fulfil the eligibility criteria, you can invest your money in a fixed deposit with any company or bank. Investors can choose where they want to invest their money, by comparing the interest rates, credit ratings of companies and other factors.
Who can invest in a fixed deposit?
If you are a new investor, fixed deposit is one of the best options for you, offering low-risk, high returns investment. As FDs offer profitable returns, there is almost no risk of principal loss, however the rate of return is limited as compared to other high-risk options.
All Resident Indians, Sole proprietorships, Partnership firms and companies, Hindu Undivided Families (HUFs), clubs, associations, societies, and family trusts can apply online for Bajaj Finance Fixed Deposit.
Non-Resident Indians (NRIs), Persons of Indian Origin (PIO) and Overseas Citizens of India (OCI) can connect with our representative or write to us on wecare@bajajfinserv.in.
How to choose the right fixed deposit
Selecting the right Fixed Deposit (FD) is crucial for maximising your savings. To begin, compare interest rates offered by various financial institutions, as higher rates will yield better returns on your FD. Consider the tenure for your FD based on your financial goals; shorter tenures provide quick access to funds, while longer tenures offer better interest rates. Additionally, check the institution's credibility to ensure your investment is secure. Lastly, evaluate the FD's payout options to match your income needs, such as monthly, quarterly, or at maturity.
Why to invest in fixed deposits?
- Guaranteed returns: Fixed deposits provide assured returns, unaffected by market fluctuations.
- Safety of capital: As a secure investment option, FDs safeguard your principal amount.
- Flexible tenure: Choose investment periods ranging from 7 days to 10 years as per your needs.
- Regular income: Options for periodic interest payouts ensure a steady income stream.
- Loan facility: Avail loans against your FD in case of emergencies without breaking it.
- Tax-saving options: Some FDs offer tax benefits under Section 80C of the Income Tax Act.
- Higher interest rates: Senior citizens often enjoy higher interest rates on FDs.
Conclusion
Fixed Deposits offer a secure and reliable investment option for individuals seeking steady returns. By carefully considering factors such as interest rates, tenure, and additional features, you can select the FD that best aligns with your financial goals. While FDs provide stability, it is essential to diversify your investment portfolio to manage risk effectively. For comprehensive financial planning, consider consulting with a financial advisor to explore other investment avenues alongside FD.
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