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Why should senior citizens invest in a Bajaj Finance Fixed Deposit?

Senior citizens invest in a Bajaj Finance Fixed Deposit
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Senior citizens invest in a Bajaj Finance Fixed Deposit

Highlights

In India, the central bank is responsible for the flow of money in the economy, also known as liquidity.

In India, the central bank is responsible for the flow of money in the economy, also known as liquidity. When it comes to fixed deposit, terms like 'liquidity' and 'flow of money' may appear unrelated, but the reality can be quite surprising. Liquidity in the banking channel can significantly impact the interest rates offered on deposits by banks and NBFCs.

Let's find out and try to understand how the central bank's actions affect interest rates, and why Fixed Deposit is arguably one of the best investment options available for risk-averse investors.

Lucrative interest rates in the times of low-interest regime

The Reserve Bank of India slashed the repo rate by 115 basis points since February 2020. The primary aim of the reduction was to inject liquidity into the economy, at a time when many sectors were facing a cash crunch. Historically, low repo rates increased the supply of money, and helped major sectors mitigate the liquidity crisis.

However, it has also led to excess liquidity in the banking channel. Simultaneously, there has been an uptick in inflation, while the credit offtake remains subdued. All these factors together have forced financial institutions to reduce fixed deposit interest rates. FD rates in India largely move in consonance with the repo rate set by the central bank.

While FD rates may be lower than usual today, financial experts believe the 'low interest rate regime' to be at its fag end. The central bank has kept repo rates unchanged in the recent Monetary Policy meetings, and these rates are likely to increase in the coming months. The likelihood of repo rate cuts in the near future, is also unlikely. Even in the present low interest rate scenario where rates have plunged to below 4%, there are several financiers offering FD interest rates in the range of 5-7%.

Online investment facilities for greater convenience

A fixed deposit scheme has traditionally been a popular investment option in India. Assurance of returns and ease of understanding make fixed deposit schemes especially suitable for senior citizens. With fixed deposit, one doesn't have to keep an eye on the unpredictable financial markets. Equities or debt instruments may offer higher returns in certain scenarios, but it is worth remembering that higher returns come with high risks. Fixed deposit plays a crucial role in managing investment risks and diversifying the portfolio. With a fixed deposit scheme, senior citizens can ensure a risk-free post-retirement income.

Several financial institutions offer fixed deposit schemes in India. However, Bajaj Finance online FD is one of the safest options available. Here is why Bajaj Finance FD scheme could be the perfect fit for your portfolio.

Assurance of guaranteed returns

With a Bajaj Finance fixed deposit scheme, you can be assured of guaranteed returns on your deposit. Other investment options like equities may offer the potential for higher returns, but only a few investment options offer assured returns.

A clear knowledge of the returns, and the final value of the investment will help you plan better for the future. Moreover, you can earn 0.25% more if you are a senior citizen. Besides the age, the tenure and the payout frequency also play a role in determining the fixed deposit interest rate, and one can earn higher returns by staying invested for longer tenures.

Here is how much a senior citizen can earn in five years by investing in a Bajaj Finance FD scheme.




Investment amount Investment Tenure Interest Rate Interest Payout Maturity Amount
Rs. 25,00,000 60 months 6.85% Rs 9,81,871 Rs. 34,81,871
Rs. 25,00,000 48 months 6.85% Rs 7,58,653 Rs. 32,58,653
Rs. 25,00,000 36 months 6.85% Rs 5,49,745 Rs. 30,49,745

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

The needs of every individual are different. Some may invest in a fixed deposit scheme to build a large corpus, while others may need a regular income. Non-cumulative fixed deposit schemes provide senior citizens with the comfort and convenience of having a regular income. Here is how much a fixed deposit with monthly payout frequency will offer, for a deposit amount of Rs. 25,00,000, with an investment term of 3 years.


Deposit Amount Tenure Payout Frequency Interest Rate Interest Payout per month
Rs. 25,00,000 36 months Monthly 6.64% Rs. 13,833


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

In addition to attractive returns on your deposit, you can also look at determining returns on your deposit, even before investing. Know the returns on your investment beforehand, with a Bajaj Finance FD Calculator, so you can plan your investments better.

Low risk

Fixed deposit is considered to be the perfect investment option for diversification of one's portfolio. It acts as an anchor for the entire portfolio, as predetermined returns offer stability when the markets witness excessive fluctuations. While fixed deposit schemes are designed to provide assured returns, it is also important to take a look at the history, and market position of the financial institution. Bajaj Finance FD scheme is rated FAAA by CRISIL and MAAA by ICRA, which essentially means the gold-standard in the safety of deposit. The security of investment is critical, as one cannot afford to lose their hard-earned money post-retirement.

Flexibility

When it comes to investing in a Fixed Deposit, you need to set aside a lumpsum amount. However, Bajaj Finance also offers the option to save on a monthly basis with amounts starting Rs. 5000 per month with Systematic Deposit Plan (SDP). The maturity period under the plan is a minimum of 12 months, and a maximum of 60 months. With this monthly savings plan, you can save in a disciplined manner, without worrying about the availability of cash in times of emergencies.

While the central bank may or may not change the repo rate, you need to build a secure and financially stable future. Waiting for the interest rates to change may prove to be counterproductive in the long run. Invest in a Bajaj Finance online FD from the comfort of your home, and ensure a financially stable and secure future.

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