India as a whole continues to reel from a series of unfortunate events that rocked the economy. Normally, when inflation rates are high, the RBI (or any central bank for that matter) is likely to adopt a 'tight monetary policy' as a means to tame inflation. Such a move translates to a concurrent spike in lending (consumer/business loans) rates as well as deposit (fixed deposits/recurring deposits) rates by retail banks. Under such circumstances, fixed deposit becomes an extremely attractive investment avenue that offers decent returns with lowest risk involved.

However, the status quo is very different. Despite inflation hovering above the acceptable 6% mark, the RBI has kept its repo rates (rate at which it lends to banks) at 4%, in the recent RBI MPC (Monetary Policy committee) meeting held on December 4, 2020.

Why should you choose to invest in FD?

Due to the consistent fall in repo rates, it came as no surprise that interest rates on term deposits bottomed out. It was particularly distressing as FDs have historically been one of the most preferred investment avenues for the salaried class. Does that mean you should consider investing in stock markets? Perhaps not, especially with the fluctuating stock indices. Mutual funds have also been giving negative returns, and the returns on government savings schemes are also at an all-time low.

Despite the availability of so many investment products, the Indian public is still enamoured by fixed deposit, because of the following advantages, it offers over market-linked investment vehicles:

• Assurance of guaranteed returns
• Hassle-free withdrawal
• Flexible tenure options
• Custom pay-out structures
• Stable growth of savings

Looking at these benefits, it's easy to understand why FD is very popular. Investing in FD is safe and lucrative enough, and the simplicity of investment processes can be understood by any average individual. This brings us to the present day where the prospect of investing in fixed deposit is sweeter than ever, but FD interest rates aren't quite what they used to be. Fortunately, for those who are looking to invest in an FD, it would make sense to invest in Bajaj Finance fixed deposit schemes. Here's a look at the different benefits of investing in a Bajaj Finance FD.

Assured and pre-determined returns

In the current economic climate, Bajaj Finance fixed deposit offers interest rates of 6.60% for individuals below 60 years of age, and an additional 0.1% if you're investing online, which can go up to 6.85% for senior citizens. Parking your money here is a sound decision, as the institution currently offers the highest interest rates amongst other FD alternatives.

Staying invested in an FD for longer periods enables you to earn a higher rate of return, as illustrated in the following tables.

Returns on an initial investment of Rs. 10,00,000 for 1 year

FD type	Principal	Tenure (Years)	Payout intervals	Interest rate	Periodic payouts	Total Interest earned
Non-senior citizen (online)	Rs. 10,00,000	1	Monthly	6.03%	Rs. 5,025	Rs. 60,300
Non-senior citizen (online)	Rs. 10,00,000	1	Quarterly	6.06%	Rs. 15,150	Rs. 60,600
Non-senior citizen (online)	Rs. 10,00,000	1	Half-yearly	6.11%	Rs. 30,550	Rs. 61,100
Non-senior citizen (online)	Rs. 10,00,000	1	Annual	6.2%	Rs. 62,000	Rs. 62,000

Note: ROI in the above calculator may vary upto 4 bps with the actual rates offered

Returns on an initial investment of Rs. 10,00,000 for 5 years

FD type	Principal	Tenure (Years)	Payout intervals	Interest rate	Periodic payouts	Total Interest earned
Non-senior citizen (online)	Rs. 10,00,000	5	At maturity	6.7%	--	Rs. 3,83,000
Non-senior citizen (online)	Rs. 10,00,000	5	Monthly	6.50%	Rs. 5,417	Rs. 3,25,020
Non-senior citizen (online)	Rs. 10,00,000	5	Quarterly	6.54%	Rs. 16,350	Rs. 3,27,000
Non-senior citizen (online)	5	Half-yearly	January	6.59%	Rs. 32,950	Rs. 3,29,500
Non-senior citizen (online)	5	Annual	January	6.7%	Rs. 67,000	Rs. 3,35,000

Note: ROI in the above calculator may vary upto 4 bps with the actual rates offered

Both tables indicate that choosing less-frequent payout intervals results in a greater amount of interest earned for the account holder. If the holder chooses to opt for a period in excess of a year, they stand to gain more from the option of holding till maturity, as opposed to opting for an annual payout (even if they have the same interest rates). It's also worth noting that FDs are calibrated to offer higher interest rates for longer holding periods.

If you have exact requirements regarding your investment amount as well as your investment tenure, you can plan ahead by using FD calculator to get an accurate understanding of how these plans apply to your requirements.

Low-Risk, high yield

During times of crises, it is common to see people flocking to purchase 'penny stocks' as they offer significantly higher returns when the markets stabilize. However, knowing how to pick such stocks is an art in itself, and making windfall gains in the process is a rare phenomenon.

By choosing to invest your savings in a Bajaj Finance fixed deposit scheme, you can liberate yourself from the uncertainties of investing in market-linked instruments.

Bajaj Finance FD schemes also have some of the highest credit ratings in the Indian market. CRISIL has rated it FAAA (strong degree of safety) and ICRA rated it MAAA (lowest credit risk), both of which are indicators of timely payment of interest/principal. Depositors can rest assured of a 'default-free experience' when it comes to Bajaj Finance FD schemes.

Flexibility and customization

When it comes to investing, some of the most commonly dispensed advice is to diversify. This is simply to say that investors would benefit from not placing all their funds in a single vehicle so as to protect their corpus against unforeseen economic mishaps. This method of choosing different investment amounts and tenures is made all the easier, thanks to Bajaj Finance Limited's easy online investment facilities, and the high fixed deposit rates.

Instead of investing a lumpsum amount, you can also choose to invest through Systematic Deposit Plan (SDP). SDP is unique, as it allows investors to expand their savings with monthly contributions as low as Rs. 5,000 per month. Investors also get to choose the payout intervals between monthly returns or lump-sum returns at maturity.

Repo Rates might remain stable for now, but there is always the likelihood of them being slashed even further in the near future. Such a reduction would mean lower interest rates for FDs in the near future, which would translate to lower returns for investors. Instead of weathering through these turbulent times, it is prudent to turn the tide against the slackened pace of growth by investing in a Bajaj Finance online FD today.