Due to low-interest rates, bank fixed deposit (FD) instruments have lost their sheen over the last one and half years but some such as Bajaj Finance are offering rates as high as 6.60-6.85% pa
Fixed Deposit (FD) instruments are considered to be the trusted mode of investment by millions of pensioners, homemakers, salaried employees and business owners as they offer some of highest rate of returns on deposits.
However, in the last 18 months, the Reserve Bank of India (RBI) has slashed key policy rates to multi-year lows in order to support growth and increase credit offtake.
Due to low-interest rates, fixed deposit instruments have lost their sheen over the last one and half years. For example, a one year deposit in public lender State Bank of India (SBI) is down between 85 basis points (bps) to 160 bps since the beginning of 2020. One basis point is 1/100th of a percentage.
Best FD plan
A one year deposit in SBI will fetch depositors 5.5% p.a at current rates. Same is the case with other banks as well but non-banking finance companies such as Bajaj Finance Ltd are offering better rates as high as 6.60%. For senior citizens, the interest rate ranges between 6.35% to 6.85%.
The tenure or term for deposit allowed by Bajaj Finance is 12 to 60 months (1 year to 5 years) and minimum investment amount is Rs 25,000. Deposits can be made online in Bajaj Finance FD as it can be done online as well.
Who can invest
Anyone from non-resident Indians (NRIs), Overseas Citizen of India (OCI) to Person of Indian Origin (PIO), can invest in Bajaj Finance NRI Fixed Deposit.
With this option, NRI/OCI/PIO with an NRO account, can easily choose tenures between 12 months and 36 months.
Monthly deposits
It allows customers to make monthly deposits in the Systematic Deposit Plan (SDP). The maturity period of each monthly deposit under SDP shall be for a minimum period of 12 months to a maximum period of 60 months. The depositor has the option to choose between 6 to 48 numbers of monthly deposits under SDP. The interest rate prevailing on the date of each deposit will be applicable to that particular deposit. Each deposit under the SDP will be treated as a separate Fixed Deposit. Find out more about Systematic Deposit Plan.
One can even make premature withdrawals in case of emergencies once the initial lock-in period of three years is over. However, in order to avoid loss of interest, one can choose to avail a loan against FD but this loan against FD cannot be more than 75% of FD value.
