Fixed deposit is an investment option that can be accessed via any bank. You can even invest in FDs offered by finance firms and post offices easily these days. A bulk amount can be deposited in an FD for a fixed tenor. However, the most important factor is the rate at which your deposits earn interest as it determines your overall returns at maturity.
As your deposits are safe in FDs, you can remain care-free about the present economic conditions. However, the economic instability has affected the FD interest rate as most financiers have cut down the interest rates that they were offering initially. Here are some measures that you can implement to ensure high returns from FDs:
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Check corporate FDs
Even though the bank FD rates have been lowered, you can still earn better returns by investing in post office FD plans or corporate FDs. Most post office FD plans do not provide flexible tenor and options like FD renewal. However, company FD plans do offer these features along with a high-interest rate.
For example, Bajaj Finance FD interest rate of 6.85% helps you to earn sufficient returns till maturity. Moreover, you will also get the option of choosing a tenor between 12 and 60 months as per your convenience. Let’s assume that you want to deposit Rs. 1000000 in a 3-year FD plan. The below table shows the kind of returns you can expect bank FDs, post office FDs, and Bajaj Finance FD provide:
| FD plan | Amount | Tenor | Interest rate | Interest | Maturity amount |
| Post Office FD | Rs. 1000000 | 3 years | 5.5% | Rs. 178068 | Rs. 1178068 |
| Bank FD | Rs. 1000000 | 3 years | 5% | Rs. 282037 | Rs. 1282037 |
| Bajaj Finance FD | Rs. 1000000 | 3 years | 6.85% | Rs. 219898 | Rs. 1219898 |
From this table, you can understand that it is offering better returns than other fixed deposit avenues available in the market.
Invest in tax-saving FDs
Tax-saving FDs allow you to deposit up to Rs. 1.5 lakhs and you can claim a tax deduction for it under Section 80C of the IT Act, 1961. However, you cannot withdraw your deposits prematurely and only a 5-year tenor option is available.
Strategize your investments
To drive your investments in the right direction amidst falling interest rates, you will have to deploy some smart strategies.
A smart idea would be to avoid investing in a long-term FD especially if you are not happy with the current FD rates.
However, you can still split your investment amount into several FDs to avoid any risk. You will also be able to club the returns of some FDs at a higher interest rate whenever you get an opportunity.
Laddering deposits does not mean investing all your returns in one type of FD scheme. You can explore different options that are credible and offer steady returns. To facilitate FD interest rates comparison across financiers, you can utilize the fixed deposit interest calculator that you will find on their websites.
The multi-deposit facility provided by Bajaj Finance enables you to invest in FDs of different types and tenors without any hassles.
Choose between cumulative FD and non-cumulative FD
Some of your accumulated corpus can be invested in cumulative FD to achieve steady growth for your investment and another part can be invested in a non-cumulative FD to ensure periodic interest gains.
The periodic interest gains such as monthly, quarterly, bi-yearly, and yearly payouts facilitated by Bajaj Finance helps you to take care of your smaller expenses with ease. If you still need some bulk amount urgently then you can apply for a loan against FD.
You can even withdraw your deposit anytime provided that it has been locked-in for at least 3 months from the date of investment. Senior citizens can ensure maximum returns as they get a 0.25% additional interest rate.
Hassle-free investment process
Most financiers offer an online investment procedure these days. Some of them even provide a start-to-end online process as well. One such example is Bajaj Finance FD. It not only provides an online FD form to initiate the investment procedure but also provides an online process for verification of documents. You even get a 0.10% excess FD rate on utilizing this hassle-free investment process.
The option of auto-renewal of FDs and online tracking of investments through Experia (customer portal of Bajaj Finance) makes it a convenient investment alternative for everyone. Also, you don’t have to bother about the ongoing market crisis as CRISIL and ICRA have rated its FD plans highly for ensuring safety for the investor’s capital.
Author Bio:
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.