The safety of investment and returns are the two major factors that most investors evaluate before investing in a financial instrument. As fixed deposit plans offer both, it is a preferred investment avenue for many. The numerous fixed deposit schemes available might confuse you while choosing an FD plan. Therefore, you must learn more about fixed deposits to try to implement ideas that would help you to save enough money with them. Here are some simple tips and ideas that can make a huge difference to your fixed deposit investment plans:
Choose an FD type carefully
In-depth research on the types of fixed deposit plans available in the market is a must as it would help you to make a decision that is based on your investment plans. FDs are basically of two types viz. cumulative FDs and non-cumulative FDs.
The former variant lets you withdraw the interest only at maturity whereas the latter allows you to withdraw interest periodically. Therefore, you must look at these FD types carefully to determine the one that will complement your future investment goals.
Some financiers offer multiple interest payout options to cater to the fund needs of their customers. For instance, Bajaj Finance allows you to withdraw interest after every month, six-months, quarter, or year as per your fund requirements.
For investing in an FD, you will need to pick a tenor first. A longer tenor will help you to earn more interest as the number of interest calculation cycles will increase. Also, if you avoid withdrawing the interest periodically, it will be added to your principal in the next interest calculation cycle and this will improve your earrings gradually. Therefore, you should invest in a cumulative FD of a longer tenor if you don’t require extra funds to sort your regular needs.
Avoid premature withdrawals
Investing in FDs is convenient because it can be easily withdrawn whenever you require additional funds to manage an immediate need or crisis. However, you should avoid withdrawing FDs prematurely because a penalty will be charged on your interest earnings. This will reduce the earning potential of your investment.
Some financiers like Bajaj Finance are offering collateral-free loans against FDs. You can use this feature to take care of your additional fund requirements and this will also prevent the loss of interest that you would have suffered from in case of early withdrawals.
Choose multiple FDs over a single FD
It is always wise to invest in more than one FD with varying tenors as you will be able to leverage multiple liquidity points for your future investment needs. Also, it will allow you to consolidate your returns in a high-paying FD if the FD interest rate rises in the interim.
Bajaj Finance FD scheme offers a multi-deposit facility that lets you invest in several FDs at once. You will be able to choose different tenors for your deposits and the option of investing in both FD types at once will also be available for you. The FD rate of up to 7.25% offered by this scheme enables you to earn sufficiently till your deposits mature.
Also, you can use the online FD form for investing as it will ensure that your deposits will grow at a 0.10% higher FD rate than usual. Senior citizens can rest assured as they will get a 0.25% extra FD rate. The safety of the Bajaj Finance FD scheme can be determined from the high credit ratings given by credit rating agencies like ICRA and CRISIL. All these benefits and flexibility of choosing a tenor between 12 and 60 months for your deposits make it one of the top fixed deposit schemes in 2021.
Among the different types of investment available in the market, investing in a fixed deposit scheme can be a better choice because it is a safe instrument that also offers surplus returns. However, you will need to be careful while picking the FD type as tenor as it will determine your earnings at maturity. Investing in a high-paying FD like the Bajaj Finance FD scheme will offer substantial returns and with this FD scheme, you will also be able to invest in multiple FD plans at once. Also, the features like loans against FDs will enable you to avoid premature withdrawals. The high credit ratings given by credit rating institutions like CRISIL and ICRA make it a stable investment option for everyone.