Fixed deposits provide guaranteed returns as they provide safety for your deposit amount. A fixed deposit plan is also referred to as a term deposit since the deposited amount is locked-in for a fixed term.
The current economic situation has forced many investors to rethink their investment plans. Also, many of them now prefer fixed deposit schemes over market-linked instruments to achieve steady growth for the invested capital while safeguarding it from market fluctuations.
The interest that you earn on the invested amount depends on the interest rate at which you book an FD. The fixed deposit interest rate tends to change as per the RBI repo rate, prevailing economic condition, and the position of the financier in terms of credit demand and internal liquidity. Therefore, you must explore the FD plans that offer the highest FD interest rates in India.
Banks have reduced the interest rates of their FDs because of the recent repo rate cut implemented by RBI. However, you can implement these tips to ensure that you continue to earn interest at a high FD interest rate:
Compound the returns
Once an FD matures, you can reinvest the principal amount along with interest using the cumulative FD option. You can also compound the interest earnings of multiple FD plans in simultaneously using the multi-deposit facility.
Invest in company FDs
- Company FDs offer up to a 2% additional interest rate than bank FDs. For instance, a regular bank FD will provide an interest rate of 5.5% whereas you get interest rates up to 7.35% on booking a Bajaj Finance FD.
- You can see the impact that this additional rate will have on your returns by using an FD calculator monthly interest tool that is available on their respective portals.
- Even though company FDs offer a higher interest rate, the fluctuations in interest rates might mean that you end up earning lesser returns on a long tenor FD if the interest rates rise in the future. To tackle that, you can ladder your deposits carefully to ensure that you can invest the returns at a higher interest rate whenever you get an opportunity.
For example, if you want to invest Rs. 10 lakhs in an FD then you can split the amount in 5 FDs and lock them for 1, 2, or 3 years as per your financial requirements. This means that you can benefit from the averaging of interest rates and you will also have multiple liquidity points to cover an unprecedented crisis or expense.
Bajaj Finance allows you to pick a tenor between 12 and 60 months as per your choice. Along with this, you also get the facility of depositing money in multiple FDs of different tenor and types with a single payment cheque using the multi-deposit facility. This enables you to ladder your FDs conveniently.
You will also get a 0.10% extra FD rate if you book an FD online. Moreover, these FDs have received FAAA ratings by CRISIL and MAAA rating by ICRA. These high ratings indicate that its FDs are stable and safe. Also, they ensure that you reap high returns while benefiting from the highest safety standards for your investment.
In a fixed deposit scheme, the interest rate is one of the key factors as it decides the returns that you will receive at maturity. Therefore, you must always use an FD calculator to understand the impact of interest rate, tenor, and other factors on your returns. Banks have reduced their FD rates after the recent repo rate cuts implemented by RBI. Due to this, investors are having a difficult time meeting their financial needs and goals.
One of the methods is to beat inflation by investing in a tax-saving FD but it does not offer liquidity options and its tenor is quite high as well. However, you can invest in a company FD that Bajaj Finance that offers high-interest rates up to 7.35%. Apart from that, you can ladder your deposits to benefit from the averaging of interest rates and also invest in a high-paying FD whenever you get an opportunity.