An informed investor is aware that investments are important to fulfil their financial goals and secure the future. The options are galore right from risky equities which can give high profit to fixed income instruments which are lower in returns but high on stability
The choice of investment depends upon diverse factors ranging from investment horizon, financial goals, liquidity period, return on investment and risk-bearing capability.
But no matter what the goal, fixed deposit remains the pillar of every portfolio - irrespective of the income, wealth creation goal or time horizon. If used wisely, fixed deposits can be used in versatile ways to mix and match as per tenors to meet certain portions of the financial goal.
Let’s understand from this investment guide why investors can make extensive use of Fixed Deposit.
Benefits of Fixed Deposit
Low-risk investment:
For a risk-averse investor, FDs are a viable option as there is less risk attached to this financial instrument. The risk of loss is very minimal if you are opening an FD with a bank as they are regulated by the central bank and the deposits are insured by Deposit Insurance and Credit Guarantee Corporation up to Rs 5 lakhs.
Lucrative interest of up to 6.85% return for Company Deposits
You can find deposits of varied interest rates and tenors. In company deposits, the interest rate is higher when compared to what is offered by banks and other financial companies. They are known to give 1-2% higher rates than banks. One of the known company FDs is Bajaj Finance FD. It starts with 6.60% for regular investors and running up to 6.85% for senior citizens.
For Senior citizens with less risk-appetite this is one of the optimistic choices to secure their money.
Convenient Tenure
With banks you can create deposits from 7 days to 10 years. With company FDs, one may invest in FD for a minimum period of 12 months and a maximum tenor of 5 years and even 10 years with some. With this flexibility, your short-term goals and long-term goals are met. Your financial requirements can be identified and accordingly your investment in FD will work.
Liquidity
The formalities are very less to encash your investment in FD once the tenor is complete. You may opt for renewal with a higher interest rate or opt-out and take the returns. You can even go for a premature withdrawal of funds in case of financial emergencies. Thus, it offers immediate liquidity as and when required.
Loan against FD
One may always be worried about the thought of how my investments will help when money is required.
With Bajaj Finance, up to 75% of the FD amount can be obtained as a loan against FD, here the risk of interest loss is evaded. Otherwise, premature closure of FD is also possible.
With the credibility and high stability, the safety of your investment is well taken care of so it is considered a secured investment option. Bajaj Finance FD is accredited with CRISIL and ICRA with top most ratings in fixed income instruments.
The flexibility of investment and convenience of online investing are other reasons why Bajaj Finance FD as a sought after option. You can ladder your deposits and earn from monthly payouts as well. Laddering your deposits will allow you to have multiple liquidity points over a period of time and also help you to benefit from interest rate fluctuations.
Risk averse investors can diversify their portfolio by investing in fixed deposit. Moreover, you do not need an investment advisor to help you manage your FD portfolio as it is a very simple investment instrument that can be managed easily.