An effective financial plan is one of the most important factors in ensuring that you do not experience financial burdens in the future. It also ensures you have an adequate amount by the time you retire or don’t have a primary source of income. An effective financial plan includes numerous investment instruments for ideal diversification. Some investment instruments can be used to earn high returns by taking on a higher risk, while others can be used to earn steady returns by taking minimal risk.
When it comes to earning steady and guaranteed returns over time and not having to take much risk, fixed deposits (FDs) make up the ideal investment solution. However, as numerous banks and non-banking financial companies (NBFCs) offer various kinds of FDs, knowing which one can offer high returns with the utmost flexibility becomes confusing. Here, the Bajaj Finance FD is an ideal FD product as it extends some of the highest interest rates and various other features.
Let us look at this comprehensive guide on Bajaj Finance FDs and how you can use the innovative fixed deposit calculator to develop a better investment approach.
Fixed deposits are fixed-income investment instruments that offer investors regular interest payouts based on a predetermined interest rate. Banks and NBFCs offer FDs to investors who want to park their money in a lump sum and earn regular interest or receive a lump sum amount with accumulated interest at the time of maturity. FDs are a popular choice for investors looking for guaranteed returns without any major risk involved. Since the performance or return potential of FDs is not linked to the market, they carry limited to negligible risk, making them significantly safer for investors.
Banks and NBFCs offer numerous FD products to investors, which come with different factors such as minimum investment amount, interest rate, internal payout, and maturity period.
Generally, there are two types of FDs: cumulative and non-cumulative. Cumulative FDs allow the accumulation of interest, which is compounded and added back to your initial principal amount. At maturity, you get the entire accumulated amount as a lump sum. On the other hand, non-cumulative FDs provide regular interest payouts and return the initial principal amount at maturity.
Here are some of the key features of FDs:
● Guaranteed returns: FDs come with a fixed interest rate, which investors know at the time of investing. Since the interest rate remains unchanged throughout the FD tenure, investors get predictable and guaranteed returns at regular intervals or maturity.
● Flexible tenure: FDs have a predefined tenure ranging from 7 days to 10 years, allowing investors to choose a period that suits their financial goals. However, most FD products start with a tenure of 12 months as it helps in the compounding effect.
● Safety: FDs are not linked to market trends or conditions, making them unrelated to market volatility. Hence, FDs are considered one of the safest investments. Furthermore, the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures investor deposits up to Rs. 5 lakh.
● Flexible interest payment options: Non-cumulative FDs allow investors to receive interest through flexible payout options such as monthly, quarterly, semi-annually, or annually. Cumulative FDs let the interest compound and receive the interest amount with the principal at maturity.
● Taxation: Interest earned from FDs is taxable as per the investor’s income tax slab. Tax-saving FDs offer deductions under Section 80C of the Income Tax Act up to a limit of Rs. 1.5 lakh.
What are fixed deposit calculators
Now that you know what FDs are, it is time to learn about a tool that helps immensely in choosing the right variables, such as investment amount, tenure, or frequency of interest amount. Fixed deposit calculators are online tools designed by banks and NBFCs such as Bajaj Finance to help customers estimate the final returns on their FDs. Such fixed deposit calculators require investors to input certain details, such as principal amount, interest rate, and FD tenure, to determine the returns they will get at the time of maturity.
Fixed deposit calculators help investors determine an ideal investment amount at a specific interest rate to get their desired returns and choose the best FD product. For example, if you want to have Rs. 5,00,000 at the end of 5 years, you can use the fixed deposit calculator to know how much money you need to invest as a lump sum in an FD, which provides a specific interest rate to earn Rs. 5 lakh at the end of 5 years.
Using the Bajaj Finance FD calculator to save money
Bajaj Finance offers a fixed deposit calculator to help potential investors know how much they will get after their selected maturity period and at what interest rate. This is based on their determined investment amount and interest payout frequency.
Here are the steps you can follow to use the Bajaj Finance fixed deposit calculator:
Step 1: Visit the Bajaj Finance FD calculator page.
Step 2: Select customer type from ‘Senior Citizen’ or ‘Customers below the age of 60’.
Step 3: Under the ‘Deposit Amount’ section, set your deposit amount by scrolling the bar or manually enter your investment amount in the box.
Step 4: Under the ‘Deposit Tenure’ section, set your deposit tenure by scrolling the bar or manually entering it in the box.
Step 5: Click the ‘Interest Amount Frequency’ button to select your interest frequency from ‘On maturity,’ ‘Monthly,’ and ‘Quarterly.’
Step 6: You will see all the results in the dialogue box on the right side. The results will include the ‘Annualised rate of interest,’ ‘Payout on maturity,’ ‘Maturity month,’ and ‘Total maturity payout.’
Step 7: You can also click ‘Interest payouts comparison’ to see the interest rate you stand to have based on different payout frequencies, along with the total payout and total interest payout amount.
Here are the reasons why Bajaj Finance FD can be the ideal investment product for you:
● Highest interest rates: When you open a Bajaj Finance FD, you can earn up to Rs. 8.65% p.a., which is one of the highest in the industry. Additionally, senior citizens can enjoy preferential interest rates. Furthermore, Bajaj Finance FDs offer special interest rates for some specific tenures.
● Highest safety ratings: Bajaj Finance FDs are consistently rated the highest by various credit rating agencies. They have the highest safety ratings of AAA/STABLE by CRISIL and AAA/STABLE by ICRA, further lowering the risk and increasing the return potential.
● Payout options: Bajaj Finance FDs offer cumulative and non-cumulative interest payout options. This option can help you to either earn interest at regular intervals or get the entire amount of accumulated interest as a lump sum at maturity.
● Loan against FD: If you have opened a Bajaj Finance FD, you can use the invested and accumulated amount as collateral to take a loan. Bajaj Finance offers a loan against FD of up to 75% of the deposit value in cumulative FDs and 60% in non-cumulative FDs.
● Wide range of tenure: You can open a Bajaj Finance FD by choosing from a wide range of FD tenures. You can start with a minimum investment of Rs. 15,000 and choose a tenure between 12 months and 60 months to suit your investment goals.
Fixed deposits (FDs) are popular and safer investment options for investors looking to earn guaranteed returns while safeguarding their funds. You can open a Bajaj Finance FD, which comes with features such as flexible tenures, assured interest rates, and flexible interest payout options. Furthermore, you can earn FD rates of up to 8.65% p.a. and ensure you build wealth over time. You can utilise the unique fixed deposit calculator designed by Bajaj Finance to ensure you invest an ideal amount at an optimal interest rate to achieve your investment goals set for a specific period.
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