Fixed Deposit (FD) is perceived to be one of the most reliable term deposits. Being secure and reliable they also provide an assured return, which makes them more appealing to customers. Under this scheme, the customer can deposit a certain amount in a bank or a non-banking firm for a fixed period. This fixed period is called tenor or maturity period. Investors can choose a suitable tenor. It is suggested to opt longer period schemes, as long-term plans offer more rate of interest. Fixed Deposits are tried and tested avenue since a long time for investing money. This scheme is more suitable for customers who are willing to invest their amount for a longer period with less or negligible risk.
What is the FD Interest Rate?
The main benefit of fixed deposit scheme is the interest rate offered for it. Various banks and firms have a varying rate of interest. This interest is based on the principal amount and the tenor that a customer chooses. An added feature is offered to senior citizens. Investors who are above the age of 60 years are eligible for higher interest rates.
Customers generally opt for an FD scheme which has higher rates of interest. That way investors are earning more on their money, while the principal amount is secure. Another significant benefit of investing in an FD scheme is, market fluctuation does not affect principal amount which implies security.
Cumulative and Non-Cumulative Fixed Deposits.
Customers can choose between a cumulative or non-cumulative form of FD depending on their requirements. Under the cumulative FD scheme, the interest rate is integrated with the principal amount and the sum amount is paid to the customer at the end of the maturity period. Under the non-cumulative FD scheme, the rate of interest is paid to customers periodically. The interest paid to the customer on a periodic basis is taxable. However, a customer can claim for a tax deduction when they are receiving Rs 10,000 annually on their investments.
Calculating the Rate of Interest and Amount That Will be Received
A customer can sensibly choose which scheme is suitable for their money, by checking what interest and maturity amount they will receive with the help of an online calculator. They can quickly fill up the necessary details like the suitable tenor, the amount they want to save and period of pay-outs.
What are the Offers and Schemes Provided for Fixed Deposits?
A significant perk of FD is the rate of interest offered by various institutions. Different firms have a variety of rates of interest. FDs in India are provided by most of the banks, post office and NBFCs. NBFCs are non-banking companies that offer financial services like loans, acquisition of shares, bonds, hire purchase, credit facilities. RBI regulates their working and operations within framework and directions issued under RBI act. There are many leading NBFCs in the market which provide higher rates of interest and hassle-free service.
The main benefit of investing in a non-banking firm is their higher rate of interest given on FDs. Referring to some figures, Banks generally provide interest rates between 5.50 – 8.00% rate of interest per annum while NBFCs have rates of interests ranging between 7.5% – 9.10% rate of interest per annum.
One of the significant non-banking firms, Bajaj finance is in the front line offering higher FD interest rates up to 9.10% on FDs. They also provide the feature of applying for their FDs online within a few clicks.
Applying for A Fixed Deposit Plan Online
In digital times, it has become more comfortable and less time-consuming for a customer to apply online FD. A customer can apply for any service from anywhere around the world. Investors are suggested to do in-depth research on which company or bank offer more benefits and an attractive rate of interest on FD. Investors can also use an easy tool called FD Calculators to calculate FD interest rate and the total amount they can receive at the end of maturity term. With a quick process and simple steps, the investor can easily choose their investment plan from prominent NBFCs like Bajaj Finance.