What Is The Full Form Of FD? How Can You Multiply Your Money With FD?
FD is the abbreviated form of fixed deposit. In banking language, FD full form FIXED DEPOSIT. A fixed deposit is an investment instrument which is used by investors to generate assured returns by locking-in their funds for a specific period of time.
They are among the conventional investment methods which have been run by banks since decades.
However, recently, the adoption rate of company fixed deposits offered by NBFCs (Non-Banking Financial Companies) has increased drastically as these fixed deposits offer higher interest rates as compared to traditional bank fixed deposits.
Why you should invest in an FD:
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High interest rates: Fixed deposits offer high interest rates as compared to most fixed-investment instruments. The rates are higher for company FDs in comparison to bank FDs.
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Easy premature withdrawal: In case of an emergency or financial crisis, you can instantly withdraw the FD by paying a minimal fee of 1% (approximately) as a penalty.
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Easy loans: You can apply for a loan up to 90 percent of the FD principal amount and repay it with low-interest rates.
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Low-risk investment: FDs are highly secured investments as the returns do not fluctuate with market conditions.
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Assurance: The interest rate at which you have deposited the principal amount will continue even if the FD interest rates fluctuate with changing government policies.
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Re-investment opportunity: Many banks and NBFCs offer the option of re-investment to their customers. This allows them to compound their interest earnings.
Choosing the right fixed deposit plan
- Pick a company fixed deposit: The first step is to select a lender offering high interest rate. Banks and financial institutions provide different FD plans and each one of these plans has a different interest rate. Company fixed deposits offer higher interest rates and flexible tenor.
- Tenor vis-a-vis interest rate: Choose the FD that provides high-interest rates and also check whether you are comfortable with its lock-in period.
- Accreditation: Go only for those FD schemes that are accredited by esteemed third-party organizations like CRISIL or ICRA. Bajaj Finance Fixed Deposit has been credited by both these organizations (FAAA/Stable by CRISIL and MAAA/Stable by ICRA). The company has also been accredited by S&P global ratings in January 2019.
- Calculate the maturity amount: Check your interest earnings by using the FD calculator and plan your future investments accordingly.
Benefits of investing in Bajaj Finance FD
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High interest rates
Bajaj Finance FD offers one of the highest interest rates in India (up to 8.75% for regular FDs and 9.1% for Senior Citizen FDs). Also, the interest rates increase as you increase the investment tenor of FD.
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Nominal investment amount, flexible tenors
You only need a minimum of INR 25,000 to open a fixed deposit account with Bajaj Finance. The flexibility to choose shorter tenors will help you protect your savings against inflation.
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Re-investment benefits
Upon renewal, you get an additional interest benefit of 0.25 % increased interest rate. This makes reinvestment a tempting option for investors who want to multiply their savings easily.
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Flexible interest payouts
You have the flexibility to choose interest payouts. If you wish to avail periodic interest payouts, choose non-cumulative FDs.
You can avail quarterly, monthly and half yearly interest payout frequency. If you want to earn high returns on maturity, invest in cumulative fixed deposits. Interest is compounded annually of case of cumulative FDs.
- Easy to manage
Bajaj Finance has an online service that helps you manage your FD investments at the tap of your fingertips.
You can open FD account, manage multiple FDs and track your investments using this service. You can also predict your returns in advance by using the online FD calculator that calculates the returns based on the tenor and interest rate of your FD plan.
You do not need financial advisors to help you manage your FDs with Bajaj Finance.
With so many investment options available today, it is easy to get baffled and confused while choosing the right one for you.
It is best to have an option like this in your portfolio that can help you balance the risks of other market-linked investments.
Start investing with a minimum deposit of Rs. 25,000 with Bajaj Finance Fixed Deposit and ladder your investments to amass a sizeable corpus.
Category: Investing
