Introduction to FD Interest Rate
What is FD?
A fixed deposit (FD) is a secure investment instrument that keeps your invested capital safe from market fluctuations.
Fixed interest rates, flexibility to choose the frequency of periodic interest payouts, and higher FD rates for senior citizens make it one of the best investment options for investors across all income groups.
To ensure higher returns from your deposits, you should choose a credible financier that offers a high-interest rate.
The present economic situation is such that an interest rate of 7% or more would be considered to be ideal for steering your investments in the right direction.
Top FD Interest rates in India in 2020
Fixed deposit schemes are offered by banks, financial institutions, and post offices in India. Let us check the highest interest rate in each of these categories:
Bank FD rates
Banks have slashed down their fixed deposit interest rates owing to the ailing economy and repo rate cuts done by RBI.
Therefore, the interest rates will range somewhere between 3% to 5.5% as it depends on the tenor and the bank that you select to deposit your savings.
Company FD rates
One of the highest FD interest rates in 2020 up to 7.35% is provided by Bajaj Finance FD. You will also get to select a tenor between 12 and 60 months during which your deposit will be locked-in.
Post office FD rates
The Post Office Time Deposit (POTD) offers interest rates up to 6.7%. However, this interest rate is only applicable for the 5-year Time Deposit and a 5.5% interest rate applies to tenors that are lesser than 5 years.
Therefore, it seems that the best option would be to go for company FDs like Bajaj Finance FD. It is also a safe option since it is rated highly by ICRA and CRISIL for ensuring the safety and stability of deposits.
Here are some other features of this FD scheme that make it a better option for you:
Cumulative vs. Non-cumulative FD
For receiving the interest earnings at maturity, you can invest in a cumulative FD. If you need periodic payment of interest, then you can select a non-cumulative FD.
Also, you get to choose between monthly, quarterly, six-monthly, and yearly interest payouts as per your financial needs.
The flexibility of choosing a tenor up to 60 months and an FD calculator that shows the returns in advance makes it easy for you to select an option that suits your requirements and investment portfolio.
You can choose to reinvest your returns automatically once an FD matures by choosing the auto-renewal option. For that, you will have to select the auto-renewal option while filling your online FD form.
With Bajaj Finance FD, you can earn an additional interest rate benefit of 0.10% if you choose the auto-renewal option.
Further visit: 5 Tips For Selecting the Best Loan For Two-wheeler
Investment with small monthly deposits
If you do not want to invest a huge corpus in FD, then you can invest in a Systematic Deposit Plan (SDP) from Bajaj Finance.
This deposit plan allows you to deposit Rs. 5000 or more every month for a period between 6 to 48 months as per your investment potential and requirements.
You can lock-in each deposit for up to 60 months or you can choose a single maturity date for all the deposits under SDP.
Each deposit is considered as an individual FD and the deposit will grow at an interest rate that prevails on the date of the deposit.
A Fixed Deposit is a fixed income instrument that gives you assured returns upon maturity. A fixed deposit provides the flexibility to choose tenor and the frequency of periodic interest payouts.
For increasing your income through an FD, you should explore the highest FD rates in India. Bank FD rates are on the lower side whereas the POTD offers a higher interest rate only for the 5-year deposit plan.
Bajaj Finance FD is offering one of the highest FD interest rates in 2020. You can also benefit from the auto-renewal option, SDP, and other features with Bajaj Finance FD.