If you explore the current FD rates in the market, you will notice that the FD rates have been reduced by most banks. Therefore, you should dive deeper into financial markets to find other options that can provide better returns. Also, you need to make some smart choices that can help you to earn steady returns during these times.
Some of these wise investment strategies are mentioned below:
Additional FD rates to senior citizens
Senior citizens get slightly better FD rates than regular citizens. They can utilize this additional interest rate to get better returns at maturity. Therefore, if you or a close relative of yours is above 60 then you can benefit from this higher rate of interest.
Explore Corporate FDs
If bank FD rates are below your expectations then you can think of corporate FDs as they offer much better interest rates. Corporate FDs are offered by finance firms and NBFCs. For example, Bajaj Finance offers an interest rate of up to 6.85% on its FD plans that is one of the highest FD interest rates in 2020.
It is also a safe option as it has been recognized by credit rating organizations for ensuring the stability of the depositor’s money due to which they have given it high credit ratings.
A minimum of Rs. 25000 is required to invest in its FDs and you can also use an online FD form to open an FD account from the comforts of your home or office. On utilizing the online procedure, you become eligible for an excess FD rate of 0.10% and if you are a senior citizen then you will get a 0.25% additional FD rate.
Invest your savings in multiple FDs
You can invest in multiple FDs of shorter and longer lock-in periods simultaneously. This will help you to continue earning at an interest rate currently offered by a financier. However, if the rates go up again then you have the option of investing the returns of your short-term deposits at a better interest rate.
Also, an FD that is locked-in for a shorter period might prove to be useful for covering an immediate fund requirement.
A part of your funds can be diverted in a non-cumulative FD as it provides a periodic interest payout. This amount can be further used to pay your bills and to take care of some other expenses. The remaining part can be invested in a cumulative FD to multiply your returns over a longer tenor.
The multi-deposit facility of Bajaj Finance allows you to invest in both these FD types simultaneously. Moreover, it allows you to pick a tenor ranging from 12 to 60 months according to your financial plans. You can utilize the FD calculator provided on its portal to check the returns of both FD types simultaneously.
If you require funds immediately then you can take a loan against FD instead of disturbing your deposits. An amount up to 75% of the FD value might be approved as a loan and you can apply for it without any collateral.
As the fixed deposit (FD full form) rates have declined constantly this year, you should strategize your investments wisely to earn better returns. You can split your deposits into smaller chunks and invest them in several FD plans so that you can invest your returns in a high-paying FD whenever the FD rates go up again. You can even invest in a corporate FD like Bajaj Finance to earn higher returns. Its multi-deposit plan enables you to invest in multiple FDs consisting of cumulative and non-cumulative fixed deposit plans at once without any issues. Moreover, it is a safe alternative to bank FDs as credit rating organizations like ICRA and CRISIL have rated it highly as a safe and stable investment.