Fixed deposits are one of the most mainstream investment alternatives in India. Not only for fixed and secured returns but because Fixed deposits have evolved over the years into highly versatile and flexible financial products offering a slew of benefits.
Fixed deposit is a hassle-free deposit wherein a lump sum of money is bolted for a fixed timeframe. By putting resources into FDs you can set aside and procure cash simultaneously. FD interest rates 2020 are higher when contrasted with an ordinary bank account.
In any case, the tenure for the fixed deposit ranging from 7 days to 10 years is chosen by the individual who invests his funds.
Top 6 benefits of FD
Apart from the latest highest FD interest rates 2020, following are some of the benefits of Maintaining a Fixed Deposit account in India.
- Guaranteed Return
Being market- free and giving assured returns are the reasons which make FDs more preferable. A quoted rate of return is guaranteed once you invest your funds in a fixed deposit account.
- Provide flexibility
Fixed Deposits are such a great option when it comes to flexibility.
- Tenure: Tenure is a fixed time period for which the fixed deposit is held. FDs offer tenure options ranging from 7 days to 10 years. It gives you the flexibility of choosing your tenure based on your specific needs and goals. Moreover, in the case of FDs, you can invest in multiple accounts simultaneously catering to different goals at the same time.
- Interest Payout: Interest earned in a fixed deposit is paid in two ways, viz. cumulative and non-cumulative. It lets you choose how you wish to receive interest that can be annual, monthly, or during maturity.
For those looking for regular income like senior citizens, non-cumulative FDs are the best fit. Otherwise, cumulative FDs are more advisable as they offer higher returns than non-cumulative ones owing to the benefits of compounding interest.
- Inculcate a habit of Saving
Everyone desires to have a good balance to rely upon in the midst of hardship but not all can actually save. Fixed deposits encourage people in building a propensity to save. Once you invest in an FD, the amount is not received until you withdraw or FD becomes matured.
- Helps during Emergency
With features like loan against FDs and pre-mature withdrawal, fixed deposits can be of great help during contingencies. Many banks and NBFCs offer secure loans against Fixed Deposits where up to 90% of the deposit can be availed as a loan. The rate of interest of this loan is low in comparison to loans offered by the banks making it a more viable option for people with FD accounts.
- Higher Fixed deposit rates for Senior Citizens
Senior citizens are offered higher fixed deposit interest rates than regular investors. The additional interest rate for senior citizens usually ranges from 0.25% to 0.65%.
Company FD list with a higher rate of interest for Senior Citizens
|Company FD||FD Interest rates 2020||Tenure of FD|
|Bajaj Finserv FD||7.65% – 7.85%||1 – 5 years|
|LIC Housing Finance FD||7.50% – 7.60%||1 – 5 years|
|HDFC FD||7.30% – 7.50%||12 to 84 months|
*FD Interest Rates 2020 as of 22nd January
With ICRA’s MAAA (stable) rating, CRISIL’s FAAA (stable) rating and being one of the most solid fixed-income instruments, Bajaj Finance Fixed Deposit is the best venture for senior residents. You can pick the interest payout frequency, tenure and deposit amount keeping in account your specific needs, goals and convenience.
By putting resources into a Bajaj Finance FD, you increase exceptional yields, yet additionally, guaranteeing high wellbeing of your investment amount.
- Tax-Saving Option
With a tax-saving FD option, the taxable income reduces and brings down the tax to be paid too. Investors can put in up to Rs. 1.5 lakh of the amount in a tax-saving fixed deposit which can be quoted in deductions u/s 80C of the Income Tax Act, 1961. This option comes with a lock-in period of 5 years, i.e. before this, no premature withdrawals can be made (only in case of the untimely death of the deposit holder).
FD interest rates 2020
Since the last few times, FD interest rates 2020 are falling down because of the recession. Most banks and financial institutions have slashed fixed deposit rates lowering the maturity value on these deposits.
The latest announcement about FD rates of all banks is topped by RBI cutting the repo rate and reserve repo rate by 75 basis points and 90 bps, respectively were 100 basis points/bps = 1 per cent. The repo rate now stands at 4.4% and reverse repo rate at 4%.
It later announced a further cut of 25 basis points (100 basis points/bps = 1 per cent) in the reverse repo rate to 3.75% from 4% earlier while coping with the impact of the recession.
In these times of uncertainty and market volatility, FD has proven to be the best online investment for those looking for sustainable growth in their corpus. This article will help you find out the latest interest rates for all banks and thereby make a well informed financial decision.
List of latest FD Rates announcements by top Banks and NBFCs based on different FD tenures
|Name||Tenure of 1 year||Tenure of 3 years||Tenure of 5 years|
|IDFC First Bank||4%||4.5%||4.6%|
As shown in the table above Bajaj Finance offers higher interest rates in comparison to other banks. So, at this time of financial crises, investment with Bajaj Finance is a more profitable option.
Benefits of investing in Bajaj Finance FD
Apart from offering one of the highest fd rates in India, Bajaj finance FDs offer you numerous value-added features such as:
- Pre-mature withdrawal
Awarded with ICRA’s MAAA (stable) rating and CRISIL’s FAAA/Stable rating, Bajaj Finance Fixed Deposits allows you to withdraw your money prematurely in case of emergencies. With 7.85% of interest rate, it offers one of the highest and best FD rates in India.
- Loan against FD
Bajaj Finance FD account holders can avail loan up to 75% of their FD amount while they keep earning interest on the rest of it. So in case of urgency, rather than breaking his FD one can go for loan option with cheap interest rates.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story