Fixed Deposit: Smart Investment for Small Investors

It is a common myth believed among a majority of the people that investment requires lump sum money. Investment can be made with both small sums as well as a lump sum amount. You need to choose the investment option based on the sum you wish to deposit, the term for which you deposit, interest rates applied, and the guarantee of the investment return. If you work with any organization that has 20 or more employees working under them, you would already be paying for the Employee Provident Fund (EPF) or Provident Fund (PF). Although PF is a type of mandatory saving, its investment returns might not be sufficient. Even if you have small savings apart from your EPF and other savings, you can invest that sum in smart investment options like Fixed Deposit.

Why Choose Fixed Deposit (FD)?

FD is known to be one of India's safest investment options offering guaranteed returns. When investing in FD with conventional banks, you can deposit a sum as low as Rs. 1000 for just 7 days tenor. The FD interest rates earned are higher than that of a standard savings bank account. Moreover, you can earn higher interests by investing in Non-Banking Financial Companies (NBFCs) compared to banks. Following are some of the features offered by investing in FD with NBFCs:

• High interest rates with more flexibility.
• Online application procedure from the company’s website.
• Assured returns with ratings from CRISIL (Credit Rating Information Services of India Limited), ICRA (Investment Information and Credit Rating Agency), CIBIL (Credit Information Bureau of India Limited) and such credit rating companies.
• Option to choose fixed interest rates and fluctuating interest rates based on the insurance companies.
• No influence from market rate fluctuations if you choose cumulative FD.
• Some Fixed Deposits even offer the facility of obtaining periodic interest payments under their schemes.

What is Cumulative and Non-Cumulative FD?

When investing in FD, you have the option to choose between a cumulative FD and a non-cumulative FD. With a cumulative FD, the interest earned is given annually or at maturity along with the investment returns. With a non-cumulative FD, you can choose the frequency of the FD interest payout on a monthly, quarterly, half-yearly, or yearly basis. Experts advise choosing cumulative FD than non-cumulative FD since it attracts higher fixed deposit interest rates.

Which is the Best NBFC for FD in India?

Bajaj Finance is known to be one of the fastest growing non-banking financial providers of India. The company offers varying financial products to cater to the unique requirements of customers. Following are the unique benefits offered by the company when staying invested in FD:

• Guaranteed investment returns with market influence.
• High FD interest rates for existing customers of Bajaj Finance and senior citizens. Also, the interest rates offered are among the highest rates offered in India (8.75% to 9.10%)
• Flexibility in choosing tenor of FD varying from 12 months to 60 months with a minimum deposit of Rs. 25000.
• Choose the type of FD from Cumulative FD and Non-Cumulative FD.
• You can also choose from fixed FD interest rates and fluctuating interest rates.
• Online application procedure with a quick application form and nominal document submission.
• 24/7 customer care assistance online as well as offline.
• High stability with a credit rating from CRISIL (FAAA) and ICRA (MAAA).
• Quick accessibility through 200+ branches spread across India.
• Facility to calculate maturity amount and interest rates using online FD calculator.
• Facility to manage FD account online from anywhere around the globe.
• The payment under this scheme can be initiated either through electronic (Real Time Gross Settlements [RTGS]) and physical (payment by cheque facility).
• On renewal under this policy, the account holder gets 0.25% or more interest as he/she was receiving from the previous scheme.
• The company maintains a follow up facility in the form of e-mail and SMS communication to its customers. This facility is valid from the date of request to the date of maturity in the respective scheme.

With such attractive benefits, FD can be the right choice for small investors. Compared to other investment options, you can gain high returns from your investment without the influence of fluctuations in the market rates.