Is Fixed Deposit A Good Option for Investment in 2021?
The annual budget is going to be unveiled on the 1st of February 2021 and many investors are waiting impatiently to see what it has in store for them. You might also be interested to know whether fixed deposit is a good investment option in 2021. However, it is likely that RBI will further reduce the repo rates in February 2021 and this might lower the bank FD rates that are already quite low during this point of time.
There are still some options in the fixed deposit segment that could give you better returns along with other FD benefits. Let’s discuss them in detail now:
Corporate Fixed Deposits
Some corporate FDs have offered better interest rates than bank FDs even during the period of economic uncertainty. Bajaj Finance FD has remained one of the high paying fixed deposit providers in India and the good news is that it is now providing an even higher FD interest rate to its customers.
The interest rate of 7.25% that it is currently offering will certainly remind you of the good old days when fixed deposit rates were high enough to provide surplus returns. Moreover, its flexible tenor options will further help you to plan your investments according to your needs. Therefore, it may be the right time for you to invest in fixed deposits.
Safety of deposits
Fixed deposits have always been a safe place to deposit your savings as they do not expose your investment to market-linked forces. As a result, you don’t have to worry about your deposited amount provided that you have chosen a credible financier like Bajaj Finance who has received high credit ratings by ICRA and CRISIL for securing the capital of its customers.
Rate of return
Eventually, it is the interest rate that will determine your returns at maturity. You should always look for opportunities that will enable you to deposit your earnings at a higher rate.
For instance, senior citizens get 0.25% extra FD rate when they invest in Bajaj Finance FDs. Also, non-seniors can utilize the online FD form for investing in one of its FD plans and get an additional FD rate of 0.10%.
To compare the interest rates and returns offered by different financers, you can check their online FD calculator. For instance, bank FDs will grow your deposits at an FD rate of 5% whereas Bajaj Finance FD rates of up to 7.25% will help you to earn substantial returns at maturity.
The difference in returns that you will get if you deposit Rs. 10,00,000 for a tenor of 5 years are specified in the below table:
| Customer Category | Interest rates | Deposit amount | Tenor | Interest gains | Returns |
| Bajaj Finance FD | 7.25% | Rs. 10,00,000 | 5 years | Rs. 4,32,261 | Rs. 14,32,261 |
| Bank FD | 5% | Rs. 10,00,000 | 5 years | Rs. 2,82,037 | Rs. 12,82,037 |
Apart from higher returns, you get many extra features with its FD plans. The facility of investing in multiple FDs with different tenors, deposit amounts, and FD types will help you to ladder your FDs to cater your financial requirements conveniently. Moreover, the option of availing a loan against an FD, will help you to use your FD as a contingency fund during a financial crisis.
Everyone is waiting for the budget 2021 that is to be released on 1st of February but the bank FD rates are unlikely to improve anytime soon. Therefore, you can think of other options like corporate FDs that can help you earn better returns via higher FD rates. Bajaj Finance FD is one such option as it not only offers a high interest rate but also provides a flexible tenor range of 12 to 60 months so that you can invest as per your financial goals and needs.
It is also a safe investment option as credit rating agencies have rated it highly for safeguarding the deposits of the investors. Options like the multi-deposit facility and loan against FD make it one of the better fixed deposit plans in 2021.