Get assured returns up to 6.85% with a Bajaj Finance FD
Fixed deposit has an essential role in an economy, as it is a major source of funds for financiers, after savings accounts. Thus, it comes as no surprise that RBI’s accommodative stance and attempt to add surplus liquidity in the economy has also affected the interest rates on fixed deposit. The repo rates were consistently reduced in the Monetary Policy Committee meetings held in 2020, resulting in downward pressure on deposit rates.
Thus, several financiers have reduced the rate of interest on deposits. With repo rates at an all-time low, locking in higher FD rates may be a smarter move. However, should you invest in bank FD or company FD, to reap benefits of high FD interest rates?
While bank FDs have been the hallmark of safety for decades, company FDs are fast-becoming the investment instrument of choice, for new-age investors. Here’s a read on what makes company fixed deposit better than bank fixed deposit.
Attractive interest rates
In the current situations, interest rates on bank FDs hover around 3-5%, whereas company FDs are offering 50 to 100 bps higher FD interest rates than banks. When it comes to choosing the right financier, Bajaj Finance Fixed Deposit comes across as one of the preferred investment options. You can earn assured returns up to 6.60% by investing in a Bajaj Finance FD, with additional rate benefits of 0.10% for non-senior citizens investing online, and a lucrative rate benefit of 0.25% for senior citizens. To understand the difference between the returns on your deposit across different financiers, let’s assume you’re investing Rs. 20,00,000 in FD for 5 years.
Here is how much you can expect your corpus to grow over the 60-month period, along with its performance against FDs offered by other NBFCs and traditional banks.
Note: ROI in the above table may vary up to 4 bps with the actual rates offered
As you can see from the above table, returns on your Bajaj Finance FD are higher than those offered by bank FDs and other company FDs.
When investing in company fixed deposit, you can also opt to receive interest payouts (through non-cumulative FDs) either monthly, quarterly, half-yearly or on an annual basis. In fact, you can also use FD Calculator to determine the returns on your deposit before investing.
Additionally, Bajaj Finance offers the option to save on a monthly basis with Systematic Deposit Plan where you can start with deposits of Rs. 5000 and more, each month. This is an easier way to lock into FD interest rates and ladder your investments easily to raise capital for short-term and long-term goals.
You can also consider renewing your deposit, and get an additional 0.10% rate benefit on renewal. In case of urgent financing needs, you can liquidate your deposit prematurely, after a lock-in period of 3 months. In case you don’t wish to break your FD, you can also consider availing a Loan against FD, to fund your urgent needs.
Safety of deposit
When it comes to choosing a company fixed deposit, new age investors are often perturbed by gross NPAs of NBFCs, particularly during these times. This is understandable, especially due to the recent defaults on deposits, even by reputed financiers.
However, safety ratings of company fixed deposit by reputed organizations like CRISIL and ICRA play a major role in showcasing the quality of management and debt servicing ability of company fixed deposit. Usually, these credit rating agencies have an accepted standard of ratings of 14 critical points as per the performance and debt servicing of these companies, where AAA is the highest degree of safety, indicating timely payment and default-free experiences. In case of company fixed deposit, it is best to choose AAA-rated deposits such as Bajaj Finance FD. This FD carries the highest safety ratings of FAAA by CRISIL and MAAA by ICRA.
As per current DICGC regulations, each depositor in a bank is insured up to Rs. 1 lakh for both principal and interest amount on deposit(s) held in current account, savings account, fixed deposits and so on. However, with high rated company FDs, such as Bajaj Finance FD, you get assurance for guaranteed returns irrespective of the deposit amount. Bajaj Finance is also known to have ‘0 unclaimed deposits’, which are indicative of highest safety of deposit and timely payments.
Hassle-free online investment
Investing in a company FD like Bajaj Finance FD is now easier than ever, as you can choose to invest in a Bajaj Finance online FD, from the comfort of your home. In this paperless online journey, customers can also complete their investment easily, and it takes less than 10 minutes to book your FD. Get your FDR digitally, and can also track your deposit on Experia app, easily.
Make a smart investment choice with Bajaj Finance FD
While company fixed deposit trumps bank FD, due to lure of high-interest rates, it is essential to consider the following factors, when investing in any company FD:
- Company reputation and background
- Deposit repayment history
- Safety ratings of the company
- Convenience and flexibility
Looking at the above considerations, Bajaj Finance FD seems to be the ideal choice of investment instrument for investors of all types. Consider investing in a Bajaj Finance online FD today, so you can grow your savings with safety and gain additional benefits.