The Fixed Deposit
We all want to know some basic tricks and tips to multiply our existing money and wealth. If you can successfully increase or grow your wealth, it will offer you various benefits such as a comfortable lifestyle and financial security post retirement. To make it possible you need to take the right financial decisions - savings and investment.
For example, you have Rs. 50 lakhs and you want to invest in Fixed Deposit monthly Income Scheme, then make sure to have a balanced mix of investments. This will help you to gain more in the long-run.
To get a balanced or healthy mix of investments, you need to invest in a diversified portfolio. But, before you do it, you need to examine certain factors such as the risk appetite, the type of instruments suit your financial goals, and many more. You can invest in market securities like shares and mutual funds as these instruments provide a higher rate of return, but these are volatile and risky. So, to balance these risks, try some secured ways. Invest in FDs and tax-free bonds, so that, you get assured returns and keep your invested amount safe.
Also Read: Busting the Commonly Prevailing Myths About Personal Loan
You may have sufficient income, but to build substantial wealth you need to look for other avenues to generate more income. You can also think of investing in real-estate after the improvements like RERA, as real estate market is set to grow at the rate of 30% over the next decade.
So, selecting these option will allow you to multiply your investment in the long run.
To know more, read: How to Become Rich using Passive Income
Gone are the days when having a single income source was sufficient to manage household expenses. Rising cost of living demands investors look for regular sources of income to manage their expenses or to maintain a decent standard of living.
Best options to make regular monthly income by investment -
FDs are free from market fluctuations and offer higher interest rate starting from 8.40% onwards. The depositor can make appreciable interest income on minimum deposit of just Rs. 25,000 for a flexible tenure of 12-60 months. The investor can easily book the account online either in their name or for their family member.
They are subject to market risks and ideal for investors willing to take some kind of risk. Certain funds provide the option of dividend payout for investors who do not wish to invest in equity. Dividend is provided on yearly basis only. But investors will have to create a diversified portfolio and invest in multiple such funds to be able to make regular dividend income.
Know about ppf or fixed deposit
Post Office Monthly Investment Scheme (MIS)
This is a prudent investment scheme for depositors which offers 7% interest rate with monthly payouts. An individual can deposit a maximum limit of up to Rs. 4.5 lakhs while joint account holders can deposit up to Rs. 9 lakhs. This is a low-risk investment offering tenure of up to 5 years.
Rental from residential or commercial property is another great way to generate regular income. Though , you may not always be able to maintain a consistent income for reasons such as change in rental prices, not finding the right tenant etc. This option still has its own perks when managed well.
The fixed deposit was the safest investment alternatives and will always remain so, but it is no longer capable of satisfying your income expectations. If you want decent returns along with principal safety offered by FD, you have to do some research and find the most suitable schemes to invest in.
Banks no longer remain a viable option, investors willing to invest their money in FDs need to explore the schemes offered by Non-Banking organizations. NBFCs such as Bajaj Finserv have been in existence from long enough to be trusted. Besides, you get entitled to higher ROI by investing in NBFCs. If you need more reasons to invest in Fixed Deposit by NBFCs, continue reading.
Higher returns: As said earlier, NBFCs offer higher returns on FD. What’s more? NBFCs offer additional interest rate to their existing customers and senior citizens which is way higher than what’s offered by banks. For example, by choosing Bajaj Finserv FD scheme you can gain an additional 0.25% per annum over and above the average if you are an existing customer.
Credibility: Short and long-term investments tools are marked as safe and unsafe by CRISIL to highlight the trustworthiness. As a buyer, you can refer to these safety rating and make a safe and fruitful decision.
Ease of applications: Lastly, NBFCs offer online application and account management facility to make the entire process easier.
In the end, compare your options in every aspect and make your decision worthy.
Read about : Investment Option in Ghaziabad
Fixed deposit is one of the safest investment avenues present in India. It is accessible by anyone and everyone irrespective of their financial status, caste, and position in the society. The only condition is, you need to have a bank account and the money to deposit. The best part about FD is, the invested principal is highly safe compared to the money invested in market-linked securities. Plus, investing in the right place such as Bajaj Finance FD which offers a whopping ROI of 8.40% per annum can help you earn more than your expectations.
However, a series of events like the PNB scam by Nirav Modi and Mehul Choksi have put the customers in serious doubts about the security of their investment. The biggest question in the present scenario that needs to be answered is, what happens to FD investment if a bank fails or goes bankrupt? Generally, when a private bank goes bankrupt, it is taken over by other larger banks in the private sector. But what if that doesn’t happen? What happens to the investor’s money?
Before we answer the endless list of questions, let us talk about the common reasons for the failure of banks.
If a bank is declared bankrupt by the concerned authorities and no other organization takes over, the money invested in FD with that particular bank is paid back to the respective customers by the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, the refund is capped at Rs 1 lakh. This means, if you have an FD whose maturity value is 1 lakh 10 thousand, the DICGC will only pay you Rs 1 lakh. Nothing more than that no matter what you invested.
When you invest your hard-earned money in any investment scheme, you will always want to get the best return on investment (ROI) without risking your invested money. In this case, fixed deposit or FD will be the best option. A Fixed Deposit is a term-based investment plan, which is the most reliable investment option. You can get an assured return on investment at the end of the tenor if follow a proper fixed deposit investment tips.
The best part is that the ROI of an FD is not impacted by the fluctuations of the market. But, once you have invested you should wait till the maturity date. You should not withdraw the amount before the end of the tenor or its maturity. If you withdraw, you need to bear the premature fixed deposit withdrawal penalty and you will also have to face loss in the interest income. If you are still thinking about premature withdrawal of fixed deposit, you can use the FD premature withdrawal penalty calculator to calculate the loss.
But, do remember some vital facts if you are withdrawing the money prematurely:
To know these factors in details, read: https://www.mindstick.com/Blog/11900/4-reasons-why-premature-withdrawal-of-your-fixed-deposit-is-not-a-good-idea
Fixed deposit is considered one of the safest investment option by most investors. It is a low-risk, assured return investment which offers appreciable returns for investors in Ahmedabad.
Benefits of fixed deposit from Bajaj Finance.
Higher rate of interest
The deposit offers higher interest rates fixed deposit of 8.40% onwards. You can earn top-up rate of 0.25% on renewal. Under the senior citizen scheme 0.35% top up interest can be earned on the base rate. There is the special interest tenure rate of 0.25% which is available for 15 months.
There are two types of withdrawals - cumulative and non-cumulative. Cumulative lets you receive income at the time of maturity. While, from non-cumulative you can earn interest at monthly, quarterly, half-yearly and annual basis.
They are rated high on security and stability as rated by ICRA’s MAAA (stable) rating and CRISIL’s FAAA/ stable rating, so your investments are never at risk. They are free from market fluctuations and thus are an assurance of stability.
Easy to book
You can easily book investment online with just an amount of Rs. 25,000. The process requires minimum documentation and can be booked either in your name or for your family member.
You can book the FD for a flexible duration of 12-60 months. This will help you to gradually accumulate wealth and grow your corpus. While in the long run it will ensure you stay financially covered at all times.
While looking to place your life’s earnings you will come across several investment schemes. What might work now, may not be suitable for the future.
But you can always consider parking the money into an investment option which is both low-risk and a guarantee of assured return. Yes, I am talking about fixed deposit. These are free from market fluctuations. They are rated high on stability and security with ICRA’s MAAA stable rating and CRISIL’s FAAA stable rating so your savings are never at risk.
Here are some more reasons to know why your fixed deposit investment is safe.
Leading NBFCs let you book a fixed deposit online from their official website. The process can be completed with basic documentation. You can book the deposit either in you name or in the name of your family member.
The deposit does not require too much monitoring. You can access your online account from anywhere at anytime. The facility lets you withdraw amount, upgrade deposit and manage your savings as per your convenience.
You can earn appreciable interest income with higher interest rate provided by NBFCs. Interest start from 8.40% onwards. You can avail top-up rate of 0.25% upon renewal of the deposit. While senior citizens can avail 0.35% top-up rate over and above the base rate provided to them.
This interest income is tax free up to Rs. 25,000. You can submit Form 15G and Form 15H to save on interest income of Rs. 10,000 or more. Interest payouts are available in cumulative (where interest is received at the time of maturity) and non-cumulative (where interest is received at monthly, quarterly, half-yearly and annual basis) terms.
Fixed deposit is one of the safest investment tool available in India. An investment in FD can yield decent annual returns at a rate of 8.40% per annum (given you invest at the right place). Besides, the process of investing is very simple - anyone, irrespective of their knowledge restrictions can calculate the returns and invest accordingly. However, that doesn’t mean people can go easy about it! Investment in a short term or Long Term Fixed Deposit requires the same amount of financial planning as for other kinds of investment. The first and foremost, plan the worst case scenario - premature withdrawal.
All of us invest for a specific purpose, and thus, knowing the maturity amount in case of premature FD withdrawal will help you plan your financial goals more effectively. For example, if your investment is for the purpose of meeting emergency cash needs, knowing the maturity amount at different intervals in case of premature withdrawal will give you an upper hand on the situation.
Moving on, let’s talk about the process of premature withdrawal and the applicable penalty in detail.
You can use the premature fixed deposit withdrawal calculator for accurate calculations.
It is wise to park your life’s savings in secure investment options at the time of retirement to help you cover unpredictable expenses later in life. Here are few options for you to consider.
Post Office Monthly Income Scheme (POMIS)
This is a five-year investment scheme offering a maximum cap of Rs. 9 lakhs for accounts with joint ownership and Rs. 4.5 lakhs for single ownership. Its currently offering an interest rate of 7.8% per annum which is payable annually. Its interest is set at each quarter.
Senior Citizen Saving Scheme (SCSS)
It is an effective and long-term saving scheme for senior citizens above 60 years of age. An investor can save a maximum of Rs. 15 lakhs singly or jointly in multiples of Rs. 1,000. The amount that is invested cannot exceed the amount that is received on retirement. Thus, the investor can invest either Rs. 15 lakhs or the amount received upon retirement whichever is lower. The lock-in period of this scheme is 5 years with the option to extend it for further 3 years with interest at 8.3%.
These are a secure investment option for senior citizens as they are free from market fluctuations. Deposit offered by leading NBFCs provide higher interest rates starting from 8.40% onwards. While as a senior citizen FD you can avail 0.35% extra on this base rate. Upon renewal too, you can avail 0.25% extra on the base rate provided.
This means you get - (8.40%+0.35% (add-on as per senior citizen benefit) +0.25% (add-on on renewal)) to help you maximize your savings.
Know More Which are the Safest Investment Options for Retirement?
If you are about to retire or have just retired, then you have reached the most peaceful stage of life. But, this also denotes the end of your regular income. So, you must think of a proper investment scheme that can substitute your income to help you financially after your retirement.
You will find several options, and many will suggest you different options, but the best will be investing in fixed deposit, as it offers high-interest rates and reliable returns. You can even interest payment cycle as per your need.
Higher interest rates- The rate of interest of senior citizen fixed deposits is higher than other normal FDs. In a bank, you will get a maximum interest rate of 7.25%, but in NBFCs you will get 8.75% interest rate to senior citizens.
Safe and secured- FD interest rates are not affected by market fluctuations, so the investment is safe and fixed. Even you can get the maturity amount of FD investment, by using the FD Calculator.
Tax Benefits – A person pays income tax for an entire working life, but he/she should not pay for post-retirement income. Senior citizens can invest in tax saver FD for 5 years, then claim deduction up to Rs. 150000 under 80C of Income Tax Act, 1961. A normal FD interest is liable for Tax Deduction at Source (TDS). Unlike normal FD, the senior citizen FD returns are not liable for TDS if the interest income is lesser than 50000 p.a. u/s 80TTB of Income Tax Act, 1961.
Aman is working in the domain of Investment management in one of the top universities. He has published research papers and case studies in Investment and Fixed Deposit marketplace. He is an avid blogger in the domain of Investment management. you can also find him on social networking platforms.