image

What is 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 tenure as per your convenience. On completion of the pre-decided tenure, 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 Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.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 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 7.5% 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 tenure, 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:

Tenure in Months Minimum deposit (in Rs.) Cumulative Non-Cumulative
Monthly Quarterly Half Yearly Annual
12 – 23

25,000
6.90% 6.69% 6.73% 6.79% 6.90%
24 – 35 7.00% 6.79% 6.82% 6.88% 7.00%
36 - 60 7.10% 6.88% 6.92% 6.98% 7.10%

Rate benefits basis customer category (w.e.f. 04 Jul 2020):

+ 0.25% for senior citizens
+ 0.10% for online customer

Renewal:

+0.10% over and above the rate of interest at which the deposit is booked

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.