For the past few years, the investment world seemed set in its ways, but the occasional repo rate cuts came along to upend this notion. This year however, repeated rate cuts have brought down repo rates to an all-time low, thereby driving banks and financial institutions to make several cuts to fixed deposit interest rates. As a preferred investment option for most customers, there is a lot to like in fixed deposit, which offers ease of investment, attractive returns, and luxury of high liquidity. For risk-averse investors, you really couldn’t ask for more.
Since the beginning of this year, markets have seen unprecedented fluctuations in fixed deposit interest rates. These sudden variations in rates have left many investors in a quandary about whether to reinvest their funds or perhaps consider alternative investment avenues. However, with unfavorable market trends and a struggling economy, determining a low-risk, high-yield investment instrument is like finding a needle in a haystack.
However, laddering your investments is a simple strategy that ensures favorable returns amidst low fixed deposit rates.
What is Laddering?
Instead of investing in a single FD scheme for five years, let us assume you invest Rs. 5,00,000 in 5 different Bajaj Finance online FD schemes, as the institution offers some of the highest FD rates in India. Each one of the fixed deposit plans should have a different maturity date spread out with equal intervals between each FD scheme. Let’s take a look at the following example.
|FD Amount||Tenure||Interest Rate||Interest Payout||Maturity Amount|
|Rs. 1,00,000||1 year||6.35%||Rs. 6350||Rs. 1,06,350|
|Rs. 1,00,000||2 years||6.55%||Rs. 13,529||Rs. 1,13,529|
|Rs. 1,00,000||3 years||6.85%||Rs. 21,990||Rs. 1,21,990|
|Rs. 1,00,000||4 years||6.85%||Rs. 30,346||Rs. 1,30,346|
|Rs. 1,00,000||5 years||6.85%||Rs. 39,275||Rs. 1,39,275|
Bajaj Finance FD is one of the safest investment avenues offering lucrative returns and easy investment facilities. Here’s a look at some of the best benefits of choosing to ladder your deposits with Bajaj Finance Fixed Deposit.
Let's look at a comparison between interest rates offered by Bajaj Finance Limited and other banks and NBFCs.
|Financial Institution||FD Tenure/ Interest Rate||Maturity Amount Under Laddering*|
Other NBFCs (average)
|1 yr||5 yrs|
|Bank (average)||4.90%||5.80%||Rs. 568,258|
|Bajaj Finance Limited||6.35%||6.85%||Rs. 611,490|