How To Get Highest FD Interest Rates?

fd interest rates

If as a middle-aged salaried individual you are seeking investment options in 2021 to grow your money, look at various factors. Factors such as low-risk appetite and aversion to market-linked instruments. Probably fixed-income assets like Fixed Deposits (FDs), bonds, or debentures suit you the best.

FDs are the most preferred investment vehicles among the fixed income instruments primarily because they are less risky. Secondly, they provide guaranteed returns even during volatile market conditions. Thirdly, the FD rates of return are pre-determined for a wide range of investment horizons.

Due to the economic downturn in 2020, the RBI lowered the repo and reverse repo rates as a part of their monetary policy to bolster economic growth. Thus, the bank FD rates have taken a hit. So, how can you get the highest FD interest rates in 2021? Let us discuss some tips to achieve the same.

Getting the highest FD interest rates

Investing in NBFC FDs

NBFC FDs are good options to invest in during low-interest regimes. Usually, NBFCs offer a higher FD rate than banks or post-offices. 

Bajaj Finance Fixed Deposit is one of the best NBFC FDs in the country with attractive interest rates. Individuals aged below 60, can earn anywhere between 5.98% p.a. and 7.10% p.a., based on the FD type, investment duration, and interest payout frequency they have chosen. 

Bajaj Finance FD is available in two variants – cumulative and non-cumulative. You can invest for any duration between 12-60 months. You can opt for the monthly, quarterly, half-yearly, or yearly interest payout frequency.

Moreover, you can earn an additional return of 0.10% p.a., if you book a Bajaj Finance Fixed Deposit online. You are also entitled to an additional return of 0.10% p.a. if you auto-renew your FD online. If you are a senior citizen, then you will gain more with Bajaj Finance Fixed Deposit. Bajaj Finance fixed deposits offer an additional return of 0.25% p.a. to senior citizens.

Moreover, with Bajaj Finance fixed deposits, all investors are entitled to tax benefits up to Rs 5,000, under section 80(C) of ITA.

Investing for a longer time-frame

Usually, the longer the investment horizon, the greater will be your FD returns. With Bajaj Finance cumulative FDs, you can earn a minimum of 6.15% p.a. for 12-23 months, 6.60% p.a. for 24-35 months, and 7% p.a. for 36-60 months. 

Opting for a lower interest payout frequency

There is an inverse relationship between interest rates and interest payout-frequencies. Thus, you will get higher returns at lower interest payout frequencies. With Bajaj Finance non-cumulative FDs, you will get a minimum return of 5.98% p.a for 12-23 months, 6.41% p.a. for 24-35 months, and 6.79% p.a. for 36-60 months. 

Investing in multiple deposits

As FDs are subject to interest rate risks, investing in multiple short-term and long-term FDs will help you minimize your interest rate risks. Bajaj Finance multi-deposit scheme allows you to open multiple time deposits through a single cheque payment.

Investing in Systematic Deposit Plan (SDP)

Akin to SIPs of mutual funds, the Systematic Deposit Plan (SDP) is a variant of an FD with some features of a recurring deposit as well. SDPs are ideal for tackling interest rate risks. 

Bajaj Finance offers two SDP schemes – monthly maturity and single maturity. You just need to set aside Rs 5000 each month to invest in Bajaj Finance SDP schemes. Each monthly installment is invested at prevailing market interest rates on the investment date. You can choose any tenure between 12-60 months for the periodic deposits.

Final word

Apart from the above benefits, Bajaj Finance FD enables premature withdrawals and LAS facility. You just need Rs 25,000 in your pocket to book a Bajaj Finance FD. Thus, it is one of the best investment options to get the highest FD interest rates in 2021.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.

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