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Last Updated : Dec 04, 2019 03:10 PM IST

Why should you invest in FD now?

In a playing field dotted with negative-yield instruments, FDs have an important role, especially if you’re risk averse and seeking to meet short-term goals.

As an investor, navigating the current investment landscape can be riddled with uncertainty. Ascertaining whether the market is ripe for investment or not, while undertaking the task of projecting returns and lining up yields with your goals, can be difficult. Good portfolio management is of essence, in this scenario, as you don’t want to leave any of your goals unfinanced.

Among the fixed-income, bankable assets you can turn to, a fixed deposit is a tried-and-tested instrument that stands its ground. While FD doesn’t always receive the consideration and attention it deserves, you can be sure that come headwinds or turbulence, FD has the potential to drive your portfolio’s yields skywards.

Read on to know how investing in fixed deposits can help you.

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The Indian market has meandered off course in the recent past

Right off the bat, it's important for you to know that the Indian investment landscape is no stranger to sub-par, or for that matter, negative returns. In fact, research carried out by The Hindu Business Line found that the country’s stock market was the worst performing market as of August 2019. Markets in other countries fared better and Nifty, which had given just 4% returns in 2018, had delivered a nominal 1.5% in 2019 as of when the research was conducted.

Moreover, in October 2019, Financial Express reported that in the last 2 years, one-third of all equity-oriented schemes generated negative returns. So, does this mean that you should avoid equity at all costs? Not really. Instead, it means that you need to reallocate your corpus and take cognizance of threats while keeping your risk profile in mind.

FD goes beyond hedging, to aids net yields

While choosing investment vehicles, it's hard to turn a blind eye to FDs because of the guarantee of returns that they provide. To understand their usefulness, consider the case of gilt funds. Around 4-5 months back, many gilt funds were offering double-digit 1-year returns, running as high as 15-16%. Nevertheless, data by FundsIndia indicates that in the last 10 years, 1-year gilt-fund yields have varied from as low as -8.7% to as high as 26.2%.

So, how do you ensure you that your finances are capable of addressing your short-term goals? You can use an FD smartly. Say you invest 50% of your corpus in an FD, yielding returns at 8%, and 50% in a gilt fund, giving returns at a rate ranging from -8% to 15%. In the best case, your portfolio would yield 11.5% (0.5x15% + 0.5x8%).

In the worst case, your portfolio yields net 0% returns (0.5x(-8%) + 0.5x8%). Therefore, you can see how an FD, when used wisely, protects you from capital loss as well as ensures that your yields stay positive.

Why should you invest in a Bajaj Finance Fixed Deposit?

In a playing field dotted with negative-yield instruments, FDs have an important role, especially if you’re risk averse and seeking to meet short-term goals. However, not every FD offers equal returns. NBFCs provide you an edge in this regard. Amongst them, one of the best is the Bajaj Finance Fixed Deposit because of the following reasons:
  • Returns of up to 8.70%
Bajaj Finance offers regular customers an interest rate of up to 8.35% and senior citizens a rate of up to 8.70% on deposits taken for at least 3 years with interest payouts at maturity only. Consider your earnings by looking at the following table.
Customer typeDeposit (in Rs.)Interest rate (in %)Tenor (in yrs.)Interest earned (in Rs.)Maturity amount (in Rs.)% Returns
Regular5,00,0008.355Rs. 2,46,646Rs. 7,46,64649.32
Senior citizen5,00,0008.705Rs. 2,58,783Rs. 7,58,78351.75
You can determine the right investment amount using the FD Calculator, so you plan your investments in the best possible manner.
  • Best-in-class stability ratings
The returns you get depend not only on the rate of interest, but also on the stability of the instrument. Bajaj Finance FD has the highest credibility ratings of FAAA from CRISIL and MAAA from ICRA. These high ratings ensure lower probability of defaults or delays, so you can keep getting guaranteed returns. Similarly, the company has been awarded S&P Global’s BBB- rating, which further attests to its credibility.
  • Range of value-added features
When you opt for a Bajaj Finance Fixed Deposit, you can choose the Auto-Renewal feature. This allows you to stay reinvest for a long term without undertaking any extra paperwork. Moreover, your corpus grows at a faster rate, as you get a renewal bonus in the form of an extra 0.10% interest. Similarly, the Multi-Deposit facility lets you invest in several FDs with a single cheque and each deposit can have a different tenor, amount or payout frequency. Additionally, you can invest with a debit card at certain locations and avail a convenient Loan Against FD of up to Rs. 4 lakh in case you’re faced with an emergency.
  • Start investing right away

Unlike market-linked instruments that require close monitoring on an everyday basis, investing in a Bajaj Finance FD is straightforward. You can apply online in minutes, and can rest assured that your finances will grow safely and steadily. In fact, to book an FD all you need to do is set aside a sum of at least Rs. 25,000 and fill the Bajaj Finance online FD form, to get started with your investment.

As is evident, investing in an FD helps you improve your portfolio and navigate choppy waters successfully. To further enhance your benefits, remember to invest with an NBFC such as Bajaj Finance.

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First Published on Dec 4, 2019 03:10 pm
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