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Fixed Deposit: Worried About Falling Fixed Interest Rates? Know Where To Invest

The economic slowdown has penetrated in all sectors and it has also affected the banking and financial sector to some extent. While there is uncertainty around the performance of market-linked instruments, the risk-free investments are proving to be better options for the investors right now.

A fixed deposit scheme is a better choice among the fixed income instruments because they provide high returns and prove to be a safe instrument as well. However, the reduction in the fixed interest rate has been the reason for worry especially for those who use interest earnings from FDs in covering their regular expenses.  

Company FDs have not been immensely affected by the repo rate cuts and they are still offering a higher interest rate. Therefore, you can park your savings in company FDs such as Bajaj Finance FDs that provide FD interest rates up to 7.35%. 

This means that these fixed deposits provide almost 2% more interest rate than the bank FDs that can only provide an interest rate of up to 5.5% on an average. Let us understand this better with an example:

Suppose that you have 10 lakhs to invest and want to invest in a 5-year FD plan. The below table will show you the returns that you can expect after depositing Rs. 10 lakhs for 5 years in a Bajaj Finance FD and bank FD:

Bajaj Finance FD offers interest rates up to 7.35% which is one of the best FD rates in 2020. 

Fixed deposit Interest RateInterest AmountMaturity Amount Growth In Savings
Bank FD 
  1. 5.5%
Rs. 3,14,066Rs. 13,14,066
  1. 31.4%
Bajaj Finance FD
  1. 7.35%
Rs. 4,25,641Rs. 14,25,641
  1. 42.56%

The ROI (return on investment) is only 31% when you invest in a bank FD but you almost get 42% ROI on investing in a Bajaj Finance FD. The difference is huge enough to create a big impact on your savings. If you are trying to figure how to calculate FD interest then you can check the FD calculator that is provided by most financiers these days. 

You can also book a non-cumulative company FD to utilize the option of periodic interest payouts for covering your monthly expenses. You can also maximize the returns of a fixed deposit plan by following these tips:

Invest Online

Bajaj Finance provides the option of investing in an FD from the comfort of your home. By filling-up for an online FD form, you also get a 0.10% additional interest rate. Moreover, these FDs are highly rated by CRISIL and ICRA for their safety and stability. Therefore, you do not have to worry about the safety of your deposits and neither do you have to face the turmoil due to falling interest rates. 

Invest in Systematic Deposit Plan

If the current economic situation is not allowing you to invest your entire savings in fixed deposits then you can also invest in an SDP- a unique feature of Bajaj Finance FD. Systematic Deposit Plan (SDP) allows you to start investing by depositing a meager Rs. 5,000 every month. The number of deposits can be between 6 and 48 and the investment tenor can be up to 60 months. 

Each of these monthly deposits is treated as an independent fixed deposit and you stand a chance of benefiting from the higher interest rates that might prevail on their respective deposit dates. An SDP calculator is also provided on their website to help you calculate the interest earned by each monthly deposit, payout of every month post maturity, total payout, and net interest earnings.

Fixed deposit schemes are one of the best options since they offer fixed interest rates and the safety of your deposits. However, the falling interest rates have been a cause of great concern for those who relied on their interest to meet their monthly expenses. You need not worry about it as you can still get a high-interest rate by investing in a company FD. For instance, you can get interest rates up to 7.35% by investing in Bajaj Finance FD. It offers one of the best FD rates in 2020 as you get almost 2% more interest than bank FDs. Moreover, you can also invest in SDP that allows you to avail of the benefits of an FD by depositing a small amount every month.

Nomination: Every company offers this facility to its investors. Even though it isn’t something to look out for, investors should always remember to exercise this feature while filling up the details for a fixed deposit.

To conclude, investors who are looking for an investment instrument that is secured, provide assured return and offers a competitive interest rate along with a regular source of income (non-cumulative interest) should opt for a fixed deposit. Additionally, keeping in mind the above-mentioned factors can help them to invest wisely and relish the benefits.

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