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What is a Fixed Deposit?

What is a Fixed Deposit?

As an investment instrument offered by banks and NBFCs (non-banking financial companies), Fixed Deposit is a great way to grow your savings with utmost safety. It is one of the most preferred avenues that enables you to deposit a lump sum amount with your financier, and choose a tenor as per your convenience. On completion of the pre-decided tenor, your deposit starts earning an interest, throughout the chosen duration, as per the interest rate at which you locked in your deposit.

Once your investment amount has been locked in at a specific interest rate, it remains unaffected by further changes in interest rates or market fluctuations. Thus, you can get guaranteed returns on your deposit, and you can choose to get your interest on a periodic basis, or at maturity. Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.

Features of Bajaj Finance Fixed Deposit

Interest Rate Ranging from 5.65% to 6.75%
Minimum Tenor 1 Year
Maximum Tenor 5 Years
Deposit Amount Min- Rs. 25,000
Application Process Easy online paperless process
Online Payment Options Net Banking and UPI

Features of Fixed Deposit

  • The returns on your deposit are assured and remain unaffected by market fluctuations
  • FD interest rates offered by NBFCs are higher than FD rates offered by banks
  • Fixed Deposit can be easily renewed, and you can also reap additional rate benefits on renewing your deposits
  • Tax is deducted at source, from interest on Fixed Deposit as applicable, as per the Income Tax Act, 1961

Benefits of Fixed Deposit

  • Fixed Deposit is one of the safest investment instruments, which offers highest stability
  • Returns on Fixed Deposit are assured, and there is no risk of loss of principal
  • You can opt for periodic interest payouts, to help you manage your monthly expenses
  • There is no effect of market fluctuations on your Fixed Deposit, which ensures greater safety of your investment capital
  • Some financiers also offer higher FD interest rates for senior citizens

Taxability on Fixed Deposit

The interest earned from Fixed Deposit is taxable. The tax deducted at source on FD can range from 0% to 30%, depending on income tax bracket of the investor. Financiers deduct 10% TDS if interest earned is more than Rs. 10,000 in a year, only if your PAN details are available with them. However, in case your PAN details are not provided to your financial institution, 20% TDS will be deducted.

If your total income is below the minimum tax slab of 10%, you can claim a refund of the deducted TDS. You can also avoid the deduction by submitting Form 15G to your financial institution, and submitting Form 15H if you’re a senior citizen. If you fall in the higher tax bracket (20% or 30%), you would have to pay extra tax over and above the TDS deducted by your NBFC or bank.

Why invest in Bajaj Finance Fixed Deposit?

You can opt for a Fixed Deposit by Bajaj Finance, which enables you to earn greater returns with a higher interest rate. You can also leverage benefits of flexible tenor, easy online application processes, and start investing with just Rs. 25,000.

With Bajaj Finance Fixed Deposit, you get high security because of FAAA rating from CRISIL and MAAA rating from ICRA. This helps you earn assured returns, which can also be converted into periodic interest payouts, customised as per your needs.

Bajaj Finance Fixed Deposit Interest Rates

Bajaj Finance offers one of the highest FD rates in india. Check them out here:

Annual rate of interest valid for deposits up to Rs.5 crore (w.e.f 12 May 2021)

Tenor in months Minimum deposit (in Rs.) Cumulative Non-Cumulative
Monthly Quarterly Half Yearly Annual
12 – 23 25,000 5.65% 5.51% 5.53% 5.57% 5.65%
24 – 35 6.10% 5.94% 5.97% 6.01% 6.10%
36 - 60 6.50% 6.31% 6.35% 6.40% 6.50%

Rate benefits basis customer category (12 May 2021)

+ 0.25% for senior citizens

+ 0.10% for customers opening FD through online mode

Note: Senior citizens investing in a Bajaj Finance online FD will only receive one benefit (rate benefit of 0.25%), regardless of the mode of investment

Renewal:

+0.10% over and above the applicable rate of interest/card rate at the time of renewal of deposit. In case of online renewal, only one benefit (renewal benefit of 0.10%) will be extended.

In addition to lucrative interest rates and safety of deposit, Bajaj Finance offers ease of investment with its end-to-end paperless online FD process, that enables you to invest from the comfort of your home. By investing in Bajaj Finance online FD, you can also reap the benefit of 0.10% higher interest rate.

FAQ

• Can I open FD online?

Yes, you can invest in a Bajaj Finance online FD through an end-to-end paperless process. You just need to enter a few basic details for opening a FD account online. To login by providing your mobile number, you need to enter the OTP.

If you're an existing customer, verify your details and enter nominee details to continue. If you are a new customer, complete your KYC by providing PAN or Aadhaar or simply upload documents.

Enter the deposit amount, tenor and interest payout type, along with bank account details.

Choose to pay via Net Banking or UPI. For investment above Rs. 1,00,000, only Net Banking option is available. Upon successful payment, your deposit will be booked, and you'll receive an acknowledgement via email and SMS within 15 minutes.
 

• How can I save money on fixed deposit?

Fixed deposit allows you to invest your funds for a fixed term and earn returns at a fixed interest rate. The interest rate on your FD is higher than savings account, so you can grow your savings furthermore.

Here’s how you can invest in FD to save money easily.

  • If you have surplus amount to invest, you can split it into multiple FDs with different tenors and earn interest for every deposit.
  • FD interest payment can be received at its maturity or you can choose to receive interest on a monthly, quarterly, half-yearly or annual basis, to fund recurring expenses.
  • Save on a monthly basis with Systematic Deposit Plan, with deposits starting just Rs. 5000 per month.
  • Get additional rate benefits of 0.10% on online investments as a non-senior citizen and choose to renew your deposit to get 0.10% rate benefit.

If you’re looking to raise funds for emergencies, don’t liquidate your savings. You can avail a Loan against FD to cater to urgent financing needs.
 

• Can I break my FD online?

Bajaj Finance enables users to liquidate their FD online, as per their own convenience. There is a fixed lock-in period of 3 months, during which the deposit cannot be liquidated. If the amount is withdrawn post 3 months but before 6 months, the depositor can only receive the principal amount. No interest is earned if the amount is withdrawn during this period.

On withdrawing after 6 months, the interest payable is 2% lower than the applicable interest rate, at which the deposit was booked.

While premature withdrawal is always an option, it is better to avail a Loan against FD to cater to urgent expenses.

• Is there any risk in Fixed Deposit?

Fixed Deposit is known as one of the safest investment avenues, as it is unaffected by market fluctuations. However, there may be risks of loss of principal or delays in payments if you don’t choose your issuer wisely.

To avoid such a scenario, it is best to select an financier with high credibility, rated by credit rating agencies such as CRISIL and ICRA. Also, check the financial status, market reputation, CRISIL status and profile of the institution before investing, to ensure your money stays safe.

• Which is the best option for investing money now?

Individuals looking to find a balance of steady growth of savings with highest safety, must consider investing in a Bajaj Finance FD, which offers lucrative interest rates up to 6.75%, with the convenience of investing from the comfort of your home.

As one of the best investment options, one can look for highest safety of one’s deposit with Bajaj Finance, with accreditation of highest safety ratings of FAAA by CRISIL and MAAA by ICRA. These ratings indicate highest safety of deposit, with assurance of timely payouts.

In a market ridden with high volatilities and fluctuating stock indices, it is best to allocate a portion of your savings in a Bajaj Finance online FD, which offers inflation-beating returns and safety of your deposit.

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