What you need to know about Fixed Deposit Interest Rates
New Delhi | Jagran Brand Desk: Fixed deposit is one of the most popular investment avenues, which is preferred by investors of all ages and different risk appetites. Despite drop in repo rates, and subsequent reduction in FD rates by banks and NBFCs, there was no dip in deposits. Rather, deposits have risen by over Rs. 2.8 lakh crores, during the lockdown.
The reason why most people prefer to invest in FD is that these are reliable instruments that are not impacted by swinging stock indices or fluctuating economic conditions. Additionally, managing your deposits is easier, and there is no impact of market fluctuations on your investments.
For those planning to grow their savings in a stable manner, investing in a fixed deposit is a smart choice. However, most people decide where to invest, on the basis of FD interest rates.
Read on to know how interest rates affect your deposits, and why are they so important.
How interest rates affect your investment?
When you invest in a fixed deposit, your savings earn interest as per the pre-decided interest rates offered by your issuer. If you lock-in to higher interest rates, you can enjoy higher growth of savings. The interest rates on your FD remain fixed, and the returns on your deposit remain unaffected by any change in market forces. In fact, even if the issuer changes the rate of interest, the amount you’ve invested continues to gain interest as per the rates at which you locked in your investment.
Factors affecting FD interest rates
As one of the most essential features of a fixed deposit, the interest rates on your FD depend on the following factors:
- FD issuer – The interest rates offered by every issuer vary significantly. Usually, deposits offered by NBFCs and companies offer higher interest rates, than bank or post-office FDs.
- Repo rates – With a focus on increasing liquidity in the economy, RBI has reduced FD interest rates several times in the past few months. A reduction in repo rates usually exerts downward pressure on deposit rates, thereby bringing them down.
- Investment tenure – The tenure you choose also has an impact on your FD interest rates. Usually, choosing a longer tenure translates to higher interest rates. Similarly, interest rates are lower for shorter tenures.
- Frequency of interest payouts – The interest rates offered by most financiers is higher for interest payout at maturity. However, when you choose periodic payouts, your interest rates are likely to be lower
- Customer category – Most FD issuers offer a higher interest rate for senior citizens, their employees and for existing customers.
You can also get higher FD interest rates on renewing deposits, as most financiers offer a higher renewal bonus. Additionally, the economic conditions also play a major role in interest rates offered by financiers.
In the present scenario, interest rates average around 5-6%, but you can get lucrative FD rates of up to 7.60% for new customers by financiers like Bajaj Finance FD. This FD is one of the safest instrument that can help you with the assurance of guaranteed returns. Bajaj Finance also offers higher interest rates of up to 7.70% for existing customers and up to 7.85% for senior citizens. You can also get a renewal bonus of 0.10% higher interest rate on renewing your deposits.
How to calculate your FD interest?
To help investors plan their investments in advance, issuers like Bajaj Finance are offering a fixed deposit interest calculator online. You can use this tool easily, by feeding in parameters like payout, tenure, interest rates, investment amount and the interest applicable is reflected in a few seconds.
Additionally, with the FD calculator, monthly interest, maturity amount, and maturity date can also be determined easily. Along with your gains, you can also use this tool to compare FDs in the market to find the best one, offering the highest growth of your savings, within a few minutes.
Now that you’re aware of how to compute your interest rates, and why they’re so important, make a smart investment choice, with Bajaj Finance FD. With the highest safety ratings, along with 2,35,000+ happy FD customers contributing towards a deposit book of Rs, 20,000 crores, this is one of the best FDs for you to invest in.
You can dovetail your investment as per your convenience and preference, by choosing tenures between 12 and 60 months along with interest payouts as per your liquidity needs. Moreover, existing customers have the option to invest in Bajaj Finance online FD from the comfort of their homes. And new customers can also avail easy doorstep document collection facilities to enjoy a seamless investment experience.
(Note - This is Brand Desk content)
Posted By: Aalok Sensharma