The current economic scenario has confused the investors about the instruments that they must choose to keep growing their savings at a high rate. The safest alternative would be to go for low-risk investments like fixed deposits. Fixed deposits also provide better interest rates than most of the other low-risk investments.
However, before investing your money in a fixed deposit, you must compare the latest FD rates offered by various banks and NBFCs. If you are planning for short term investments then it is better to go for company FDs instead of investing in mutual funds, stock market, and other market-linked options.
Company FDs are ideal even for long term investments as they not only provide high-interest rates but also provide flexibility in terms of tenor selection and various other features.
With high-interest rates, you can deposit your savings in cumulative FDs of longer tenor and reinvest the returns. This will assist you in meeting your wealth creation goals and you will also be able to hedge your portfolio against the risks of market-linked instruments.
Also, the company FDs have not seen a noticeable drop in interest rates as compared to bank FDs. Let’s say you have Rs. 2,00,000 and want to invest it for 5 years. If you choose a bank FD, the maximum interest rate offered to you will be somewhere around 5.5 to 5.6%.
However, if you invest in company FD of let’s say Bajaj Finance, you will get higher Fixed deposit rates in India up to 7.35%. To see what impact this difference of interest rate can have on returns, please check the below table:
| Fixed deposit | Interest rate | Amount | Tenor | Interest Amount | Maturity Value |
| Bank FD | 5.6% | 2,00,000 | 5 years | Rs. 64,112 | Rs. 2,64,112 |
| Bajaj Finance FD | 7.35% | 2,00,000 | 5 years | Rs. 85,128 | Rs. 2,85,128 |
You can see that your investment can grow by a little more than 32% in 5 years when you deposit in a bank FD but with the same amount and tenor, your ROI can increase by well over 42% in 5 years when you invest in a Bajaj Finance FD.
However, you must also analyze these things before investing in a company FD:
Safety ratings
Corporate FDs are high-paying. However, you must also check the safety ratings of the FD that you are investing in. For instance, your invested amount is safe with Bajaj Finance FD as it has received high ratings from ICRA and CRISIL.
Online procedure
Most investors prefer the online mode of investment these days. Therefore, you can fill an FD online form without stepping outside. With Bajaj Finance, you also get an additional 0.10% rate upon using the online option for investing in FDs. You can even use their FD calculator online to calculate the returns offered by various FD plans.
Loan against FD
Withdrawing an FD prematurely due to financial crisis or any other reason might result in reduction in interest-earning as banks and NBFCs tend to charge a penalty for the same. However, if the financier you are investing with is also offering a loan against FD then you need not break an FD.
Among the risk-free instruments, FD is one of the better alternatives for those who want to grow their savings steadily. The bank fixed deposit rates in India have been reduced due to the changing economic conditions and RBI’s policies. However, corporate FDs are still offering a better interest rate. Before investing in a corporate FD, you must also check its other features and safety ratings. Therefore, you can invest in company FDs like Bajaj Finance that not only offer FD rates up to 7.35% but are also highly rated for ensuring the safety of your investment.
