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.
Why do we need fixed deposits?
In most cases, time deposits are the investor’s choice of any other choice, because time deposits are safe and have higher interest rates. You can also save taxes by investing in FD in accordance with Article 80c. Some people have savings options, while others have profit options. The interest rate may be as high as 9% and will change according to market trends. The good news is that you will receive the same percentage of interest as when you invested. In this way, your investment will not be affected by market trends, and the interest rate will remain unchanged throughout the period.
Are you an ideal investor in FD?
Almost all banks in India provide you with the option of applying for FD. Every resident, every NRI, every organization/company can apply for FD. Time deposits are good for those who are superfluous without spending money. It also provides capital protection and guaranteed income. Income may below, but if you don’t want to take risks and buy stocks, FD is your ideal choice. As the bank’s FD/NBFC fixed deposit interest rate is very profitable.
The characteristics of time deposits
Long-term investment-FD helps you to obtain a constant interest rate in the long-term, and make your funds safe and risk-free.
You only need to deposit once, and then wait for the expiration date, because your funds will continue to grow.
Time deposit receipt
You will receive a time deposit receipt, which can be used online or offline.
FD interest should be paid quarterly or semi-annually at the request of investors.
you can also choose tax-free FD, in which you can invest up to 150,000 to save income tax.
The advantages and disadvantages of fixed deposits
- Low risk: Under the circumstance that market risks will not affect your funds, the FD account is a safe place to store funds.
- Relative to FD loans: In an emergency, people are looking for assets that can be easily liquidated, and FD is one of the options.
- Stable income: FD pays interest quarterly or semi-annually according to the requirements of investors to obtain stable income.
- More information for seniors: Fixed deposits provide higher interest rates for seniors.
- Tax credit: As mentioned above, you can use tax savings of less than 80 cents to invest over 5 years.
- Reinvestment options: You can request to reinvest your funds after the funds expire.
- Fight against inflation: Everyone knows that FD is the best option for maximizing profits, but there are other options that can double your income.
- Decreased liquidity: After the FD collapses, you will lose most of your profits before the expiry date.
- Less tax relief: even for investments below 80°C, your income will be taxed.
How to apply for an FD online?
Obtaining an FD is a very simple process. All you have to do is activate your online bank account from any bank account. You don’t have to ask to know your customer (KYC) because the bank does not have to double-check. Check online and get the best FD price. Do proper research before applying for FD with the current offering.
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.
Investing in FD is a tedious task because you will need a lot of paperwork to meet your requirements. proof of address. Now, the fixed interest rate for bank/NBFC deposits is quite good, and if it can be processed in an emergency, the option of regular income and tax-saving makes the business very attractive. If you intend to solve your hard-earned cash, FD is your best choice, because I check all the information about FD, including pros and cons, how to open an FD account offline and online, and all this information.