What is a Fixed Deposit?

What is a Fixed Deposit?

Fixed deposits are investment instruments offered by banks and non-banking financial companies, where you can deposit money for a higher rate of interest than savings accounts. You can deposit a lump sum of money in fixed deposits for a specific period, ranging from 7 days to 10 years.

Once the money is invested with a reliable financier, it starts earning an interest based on the duration of the deposit. Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.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 Fixed Deposits

  • Fixed deposits enable investors to earn higher interest on their surplus funds
  • You can deposit money in a fixed deposit account only once, but to deposit more money, you need to create another account
  • Though liquidity in fixed deposits is lesser, you can look for higher rates of interests, which are higher in case of company fixed deposits
  • Fixed deposits can be easily renewed
  • Tax is deducted at source, from interest on Fixed Deposits as applicable, as per the Income Tax Act, 1961.

Benefits of Fixed Deposits

There are several advantages of fixed deposit investments, some of which have been given below:

  • They are the safest investment instruments, and offer greater stability
  • Returns on fixed deposits 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 deposits, which ensures greater safety of your investment capital
  • You can benefit from higher interest rates offered by company fixed deposits
  • Some financiers also offer greater returns for senior citizens

Also Read: Different Types of Fixed Deposits

Taxability on Fixed Deposits

The interest earned from fixed deposits is taxable. The tax deducted at source on FDs can range from 0% to 30%, depending on income tax bracket of the investor. Financiers deduct 10% TDS if your interest earned is more than Rs. 10,000 in a year, 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.

Also Read: What is Form 15G & Form 15H

Why invest in Bajaj Finance Fixed Deposits?

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 Deposits, 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.

Documents for starting Bajaj Finance Fixed Deposits

If you’re looking to invest in Bajaj Finance Fixed Deposits, here are the documents you need:

  • Latest Photograph
  • Certified KYC documents

Public or private limited company

  • PAN
  • Certificate of incorporation
  • Memorandum and Articles of Association
  • Partnership deed
  • Board resolution for opening the FD account
  • ID proofs of authorised signatories

Partnership firm

  • PAN
  • KYC documents of the firm
  • Certificate of registration
  • Partnership deed
  • List of authorized signatories with specimen signatures
  • ID proofs of authorised signatories

Hindu Undivided Family

  • Certified KYC documents
  • Self-attested PAN card bearing the name of the HUF
  • Deed of declaration of HUF
  • Bank account statement/DEMAT statement in the name of the HUF
  • KYC documents for all adult members of HUF

Statutory board/local authority

  • PAN
  • KYC documents
  • List of authorized signatories with specimen signatures
  • Self-certification on letterhead

Registered societies

  • PAN
  • KYC documents
  • Copy of registration certificate under the Societies Registration Act
  • List of members of the managing committee
  • Committee resolution for persons authorized to act as authorized signatories, with their specimen signatures
  • True copy of society rules and by-laws, certified by the chairman or secretary

Bajaj Finance Fixed Deposit Interest Rates

Bajaj Finance offers one of the highest interest rates in the market. Here’s a brief lowdown on the same:

Tenor in Months Minimum deposit size (in Rs.) Cumulative Non-Cumulative
Monthly Quarterly Half-yearly Yearly
12 – 23 25,000 8.00% 7.72% 7.77% 7.85% 8.00%
24 – 35 8.15% 7.88% 7.93% 8.00% 8.15%
36 – 60 8.75% 8.42% 8.48% 8.57% 8.75%
Special tenors scheme
15 Months 1,00,000 8.05% 7.77% 7.82% 7.89% 8.05%

Rate benefits basis customer category (w.e.f. 01 October 2018):

+ 0.35% for senior citizens
+ 0.25% for Bajaj group employees or existing Fixed Deposit customers or loan customers
Renewal: +0.25% over and above the rate of interest at which the deposit is booked

Bajaj Finance Senior Citizens Fixed Deposits Scheme

When investing in Bajaj Finance Fixed Deposits, senior citizens can benefit from a higher rate of interest that enables them to gain better returns on their investment.

Here’s a lowdown on the attractive interest rates offered to senior citizens:

  Tenor (in months) End of tenor FD Periodic Interest Payout
Monthly Quarterly Half-yearly Annual
Senior Citizen FD Rates 12 to 23 8.35% 8.07% 8.12% 8.20% 8.35%
24 – 35 8.50% 8.23% 8.28% 8.35% 8.50%
36 – 60 9.10% 8.77% 8.83% 8.92% 9.10%
Special tenors scheme
15 8.40% 8.12% 8.17% 8.24% 8.40%

Fixed Deposit Calculator

With the Bajaj Finance Fixed Deposit Calculator, you can also evaluate your returns and plan your investments in a way that helps you gain maximum profits. Using the Bajaj Finance FD Calculator is very easy. All you have to do is:

  • Choose your customer type (i.e. if you’re a New Customer/Existing Loan Customer/Senior Citizen
  • Choose the Fixed Deposit type that is better aligned with your investment goals – Cumulative or Non-Cumulative
  • Enter the amount of investment you want to make
  • Select the tenor of your investment

The total interest amount and the maturity amount will be displayed on your screen.

Still have any doubt in investing in Bajaj Finance Fixed Deposit? Check Bajaj Finserv Customer Portal to read unbiased reviews of investors or you can directly contact on Bajaj Finserv Customer Care in case of any question.