Bajaj Finance Fixed Deposit interest rates on the rise - What should be your investment strategy?

Bajaj Finance Fixed Deposit interest rates on the rise - What should be your investment strategy?

FPJ Web DeskUpdated: Saturday, January 21, 2023, 10:27 AM IST
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Bajaj Finance Limited, a leading non-banking financial company (NBFC) in India, offers fixed deposit (FD) options to its customers. These FDs are a popular investment choice among Indians due to their high returns and low risk. However, the interest rates on these FDs can change over time, and it's important for customers to be aware of any changes in order to make informed investment decisions.

 Recently, Bajaj Finance has announced a change in the FD interest rates for its customers. The new rates are effective from January 20, 2023. According to the announcement, the interest rate for FDs with a maturity of 44 months will be 8.10% p.a. for senior citizens, and 7.85% p.a. for customers below 60 years of age.

 So, if you want to take advantage of the rising interest rates by making new FD investments, you must create an investment strategy.

 Here are the two main options:

 Strategy #1: Invest right now for short to medium term with auto-renewal option

This investment strategy is going to work best for you if:

●      You have a surplus amount waiting to be invested

●      You are afraid of interest rates falling soon

●      You have aligned FD investments to your financial goals and cannot wait to get started

 You can invest in a fixed deposit right now to take advantage of the prevailing high FD rates. By doing so, you can reduce the overall risk in your investment portfolio while earning handsome returns.

 Usually, longer tenures offer better returns due to the higher interest rates. Plus, some banks, and NBFCs like Bajaj Finance offer higher interest rates for special tenures like 15 months, 18 months, 23 months and so on. For instance, for senior citizens, the interest rate for a special tenure of 44 months is 8.10%, which is higher than the interest rate for a tenure ranging from 45-60 months, which is 7.85%.

You can also use an FD calculator to plan your FD investment for the best returns. Try putting in different values for the investment amount, tenure, or pay-out options (for non-cumulative FDs), to instantly get the expected returns from these investments.

Strategy #2: FD laddering

 This investment strategy is going to work the best for you if:

●      You want to take advantage of the prevailing FD rates

●      You believe that the interest rates will rise soon

●      You want to diversify your FD investments

Start FD laddering by investing in multiple FDs that mature at different times, instead of one significant investment for a long tenure. If you have Rs. 1.5 lakh to invest in FDs, you can invest Rs. 50,000 in three FDs with tenures 12 months, 18 months, and 24 months respectively. When these FDs mature, invest the entire amount for 18 months, 24 months, and 30 months.

 You can increase or decrease the gaps in the tenures based on your financial goals and re-invest in FDs with new interest rates. An online FD calculator will help you plan out your monthly, quarterly, semi-annual, or annual pay-outs if you go for non-cumulative FDs.

For instance, for a senior citizen, a 15-month tenure, the interest rate for non-cumulative FDs paid out monthly is 7.30% p.a. and for non-cumulative FDs paid out quarterly is 7.35% p.a.

 To evaluate this better, consider an investment of Rs. 4 lakh with a non-cumulative payout for a customer below 60 years of age:

The Bajaj Finance FD Calculator is your best friend to try different permutations and combinations of investment amounts and tenures to find the FD investments that suit your expectations.

Investing online in Bajaj Finance Fixed Deposit is a smart choice for those looking for a reliable and secure investment option. With competitive interest rates, flexible tenures, and the added benefit of liquidity, Bajaj Finance Fixed Deposit offers a high return on investment and peace of mind. The company's strong financial standing and reputation for excellent customer service make it a trusted choice for both short-term and long-term investments. Additionally, the option to choose between cumulative and non-cumulative interest payouts allows investors to tailor their investment to their unique needs and goals. Overall, Bajaj Finance Fixed Deposit is an excellent investment option that offers stability, security, and high returns.           

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