Fixed deposit rates in India tend to change with time as they depend on various factors like repo rate, liquidity situation in the country, inflation rates, etc. Therefore, you must keep a check on these rates if you are interested in investing in FDs. You can invest in FDs offered by banks, small finance companies, NBFCs, and post offices. The interest rates offered by these financial institutions vary. Also, the tenor, investment policies, and interest withdrawal options vary from one FD provider to another. Here are some insights that can help you invest in fixed deposits in 2022 without any issues:
Tenor and FD rates
Tenor and FD interest rates are directly linked with each other. It is because the longer tenure usually gets you a higher rate of interest in the market. There are some FD providers who offer flexible tenor options. For instance, Bajaj Finance FD comes with a tenor ranging from 12 and 60 months. Therefore, you can pick a tenor that is in line with your investment strategies in the year 2022.
Bank FDs v/s Corporate FDs
Bank and corporate FDs don’t have many differences when it comes to investment methods and withdrawal options. However, corporate FDs are offering better interest rates in comparison to bank FDs. For example, a bank FD will provide up to 5.5% FD rate for a 3-year FD whereas a corporate FD like Bajaj Finance FD offers an highest FD interest rates of up to 6.80% for a 3-year FD. Moreover, senior citizens are eligible for 0.25% higher FD rate irrespective of the tenor they choose.
The higher interest rate offered by corporate FDs can make a huge difference in returns. If you invest Rs. 20,00,000 in a 3-year FD, the difference in returns offered by bank FDs and Bajaj Finance FD are mentioned in the below table:
|FD Plan||Amount||Tenor||Interest Rate||Interest||Maturity Amount||Growth in Investment (In %)|
|Bank FD||Rs. 20,00,000||3 years||5.5%||Rs. 3,56,136||Rs. 23,56,136||17.80%|
|Bajaj Finance FD||Rs. 20,00,000||3 years||6.80%||Rs. 4,36,373||Rs. 24,36,373||21.82%|
From the above table it is clear that Bajaj Finance FD helps you earn a much higher ROI than bank FDs. The growth in investment will be much higher if you choose a longer tenor such as 4 or 5 years. By using the
provided on Bajaj Finance’s official website, you can explore the interest earnings for the FD tenor and amount of your choice.
FD types & Returns
The interest rates also depend on the FD type you choose. It is usually seen that cumulative FDs offer higher returns as they compound the interest rates frequently as compared to non-cumulative FDs. However, as non-cumulative FDs give out the generated regularly after a specific period, they don’t compound the interest earnings much. Being said that, you may have to choose to invest in non-cumulative FDs for attaining your short term investment strategies.
For instance, Bajaj Finance FD allows you to select from monthly, yearly, quarterly, and bi-annual interest payouts with its non-cumulative FDs. Therefore, it becomes much easier for you to select the payout frequency as per your financial needs. Investing in Bajaj Finance FD is safe as it has received highest credit ratings for being a stable investment option from credit rating agencies such as CRISIL and ICRA. Moreover, the option of investing through an online FD form makes it convenient for you to invest in fixed deposit plans. The end-to-end online investment procedure allows you to complete the formalities and invest in FD in as less as 10 minutes.