The market is volatile these days and therefore, it is a crucial time for investors to reconsider their investment options. Choosing risk-free investments not only assure you of guaranteed returns but also help you diversify your investment portfolio.
Fixed deposit is one such risk-free investment instrument that can prove to be essential in both short term and long term financial planning. If you are thinking that what is FD then think of it as a deposit plan wherein you invest a lumpsum amount for a fixed tenor at a predefined interest rate that remains fixed till your investment matures.
Here are 7 reasons that make FD an ideal component of your investment portfolio:
- Risk-free investment
Fixed deposits have the reputation of being one of the safest investment options since they are not directly linked to the market. Therefore, your invested corpus will remain safe irrespective of the changing market scenario and conditions.
- Liquidity
Fixed deposits can be liquidated either completely or partially whenever there is an urgent requirement of money. Moreover, little or no penalty has to be paid for the premature withdrawal of an FD.
Most banks and NBFCs also provide collateral-free loans and overdrafts on fixed deposits. Therefore, you need not break your FD and disturb your investment portfolio.
- High interest rates
FDs offer better interest rates than the other traditional forms of investments. Banks offer fixed deposit interest rates up to 7% but investors can benefit from the higher interest rates by investing in company FDs such as Bajaj Finance FD which provides higher fixed deposit interest rate of up to 7.85%. Investing in such lucrative FDs can help you multiply your savings at a faster rate.
- The benefit of compounding
Cumulative FD allows you to leverage the power of compounding and reinvest both principal and interest, provided you don’t withdraw it. This helps you grow your savings at a higher rate.
- Ease of investment
You can create an FD account from the comfort of your home by submitting an online application form. This not only helps you save time but also offers you the advantage of managing your FD account online using Experia- your online fixed deposit account.
With Bajaj Finance FD, you can also avail the option of auto-renewal which can be used to re-invest the amount again after maturity and earn an additional interest rate benefit.
- Calculating returns
By accessing the online FD calculator, you can calculate your final maturity amount and interest earnings precisely.
Flexible investment terms
In case you do not wish to invest a huge corpus in a regular FD investment, you can consider investing in an SDP (Systematic Deposit Plan), a unique feature offered by Bajaj Finance FD. In SDP, you can deposit a fixed amount (starting at Rs. 5000 per month) for 6 to 48 consecutive months and each of these deposits can be locked for 12 to 60 months at your convenience. With an SDP plan, you can benefit from the prevailing interest that is applicable on the date of every deposit.
Investors who want to grow their income in a risk-free manner should certainly consider including fixed deposits in their portfolio.
With constant repo rate cuts by RBI, there is a possibility that FD rates will further go down. Hence, if you are wondering whether FD rates will increase in 2020 or not, then this is the right time for you to lock-in the current high interest rates before any further rate cuts happen.
Fixed deposits are not only safe but they ensure that you grow your savings quickly. FDs offer flexible investment terms, For availing higher fixed deposit interest rates and flexible investment options you can choose the FD plans offered by NBFCs like Bajaj Finance which are accredited for their safety and credibility by third-party organizations like S&P Global, ICRA, and CRISIL.
Moreover, you can start investing with only Rs. 25,000 or start depositing in an SDP plan by just investing Rs. 5000 every month. In SDP, every deposit is treated as a separate FD, and therefore, you get all the benefits and features provided by their fixed deposits.