There are several attributes that should consider while choosing an investment to align with your financial goals. Most long term investors go with fixed deposits but after making informed-decision only. Though it is a straight forward investment avenue that is not forced by market performance, still, you need to find out the best financiers that offer different facilities along with the high-interest rates comparatively. Here you will find out factors you should consider to invest at higher and best interest rates and to choose a financier for your FD.
Table of Contents
Compare FDs with different financiers.
Reserve Bank of India allows banks to set their interest rates on Fixed Deposits (FDs). You will find variation between interest rates with different financial institutions like banks, post offices, NBFCs. But yes, there is a standard range in which interest rate lies. At present, FD interest rates are between 4-6% with banks. You need to pick a financier with a higher range of interest rates. You can go with company FDs like Bajaj Finance FD to earn higher returns. They are offering interest rates between 6.60% – 6.85%, which is much more attractive than banks’ FDs.
Choose a Financer offering Non-cumulative FDs.
The interest rates depend on various factors. FD type is one of such essential elements. You can receive periodic interest or total interest amount at maturity. It will impact FD interest rates. To earn the best interest rates, invest in cumulative FDs where your claim will compound quarterly and paid to you at the maturity date.
Review the credit ratings
FDs are known for their safety and security features. Check where you are going to invest as well. Before finalizing, check the credibility of a financer for the FD account. There are different safety ratings to check the credibility of fixed deposits with a financier. You can trust a financier such as Bajaj Finance FD with ICRA’s MAAA or CRISIL’s FAAA rating.
Key Attributes that make an FD the best investment option
There are different facilities offered by other financial institutions. Some of them are listed below:
Flexibility
A fixed deposit should be flexible with regard to the lock-in periods and investing amount so that you can plan your investments to achieve your financial goals. Flexible terms on an FD allows you to ladder your assets in such a way that you can reduce your tax outgo through different maturity dates of other FDs. Just like Bajaj Finance FD, which offers flexible terms on FDs regarding tenor and investment amounts. You can open multiple FDs for a tenor from 12 – 60 months with a piece from Rs. 25,000 to 1 crore.
Premature withdrawals
There are some fixed deposits where premature withdrawals are not allowed. Better to stay away from these investments because there can be an emergency when you require your funds, but you do not have any option other than regretting your investment. Bajaj Finance FDs are allowed to withdraw premature FDs after six months of opening the FD account.
Loan against FD
In case you do not want to liquidate your FD account, you can take a loan against your FDs. It is easy to get a loan granted against FDs that’s too, with less documentation and verification formalities comparatively. You can get a loan of up to 75% of Bajaj Finance FD value.
Fixed Deposit Interest Calculator Help In Future Financial Planning?
FD interest rates in India are declining, but FDs are immuned from market fluctuations and offer guaranteed returns. Before investing in any investment, it is necessary to know your returns. In the case of fixed deposits, you can easily calculate your returns and maturity amount using an online FD interest calculator. An FD calculator helps you in future financial planning. Let’s see how.
Forecast FD Returns
You may have to calculate fixed deposits (FDs) returns for different tenors manually- a difficult task that would be outside the comfort zone of most people. You can do the same calculations easily by using an FD calculator. It minimizes your efforts and helps you decide the tenor as per your financial requirements.
Compare FD returns conveniently
As you have calculated returns for different tenors, you can compare the FD returns of other FDs with different issuers. In this way, you will be able to find out the best bank or NBFC to earn higher FD returns. For example, fixed deposit rates in post offices are between 5.5% – 6.7%, and Bajaj Finance is offering FD interest rates up to 6.85%. You can calculate FD returns using the Bajaj Finance FD calculator and compare them with post office FDs.
Helps while reinvesting
You can keep track of changing interest rates. An FD calculator is an updated tool that calculates the returns with the latest interest rate applicable to an FD. It will help you to reinvest your funds at a higher rate of interest.
Minimizes the errors
The FD interest is compounded quarterly that makes interest calculations complex. If it has to do manually, it leads to mistakes. An FD calculator will calculate the FD interest and maturity value for you within seconds.
You will get to know interest from both cumulative FDs and non-cumulative FDs that will help you to choose the right type of FD to receive interest payouts as per your needs.
Helps in Laddering
Laddering FDs without knowing estimated returns may end up with falling short of your financial goals. An FD calculator estimates the interest for different tenors, investors, amount invested and helps you to ladder FDs in the most appropriate way ensuring sufficient liquidity. Hence, you can meet your financial goals.
Estimates Future Goal Value
You may have different financial goals like kids’s education or marriage etc. To meet your financial goals several years away, it is necessary to estimate the amount you require to save from now. The future value of a plan is different from the current deal because of inflation.
An FD calculator shows you the maturity value that you will get in future at maturity date. You can check maturity values with different invested amounts for other tenors using an FD calculator.
So, an FD calculator is the best tool to calculate the amount you can earn at maturity, that too without any complicated calculation. And estimated returns will help you in future financial planning.
The Bottom Line
The qualities of fixed deposits as an investment avenue are well known to everyone. For best FD returns, take care of lender/finance also with which you are going to invest your money. There are various FD plans available in the market and you need to find the best. So, consider all above-mentioned attributes to have the best interest rates on your deposits
