Fixed Deposit Thrives On Flight To Safety, In Uncertain Investment Climate

The financial markets have witnessed extreme gyrations this year, and extreme risk aversion has driven investors to steer towards safer avenues. The pursuit of safety of savings is believed to be bereft of attractive returns, especially in today's backdrop of an economic downturn. Also, recently RBI cut repo rate and reverse repo rate by another 40 basis points, post which lenders have started cutting fixed deposit interest rates.

The interest rates for savings schemes were also reduced, which has been the worst for senior citizens who depend on regular income from deposits or such schemes, to fund their post-retirement expenses. Despite FD rates being lowered by financiers post the repo rate cut, the interest rates average around 6%, and some financiers also offer higher FD interest rates.

However, when choosing to invest in a Fixed Deposit, it is important to be mindful of risks of credit rating defaults and safety of your deposit.

How to choose a safe FD investment?

The current economic scenario has revealed several financial fault lines, thereby making the prospects of defaults on deposits very real. Thus, even when you're promised attractive FD interest rates, it has become more important to assess the financial institution, you're investing with.

Here are some factors to consider, when choosing your FD issuer:

• Financial operating parameters - When assessing a company's financial operating parameters, it is important to focus on these categories:
• Profitability Ratios
• Growth Ratios
• Asset quality Ratios
• Capital Adequacy Ratios

These ratios will help you determine whether the company you're investing in, will keep your money safe. Additionally, make sure you invest in companies with Net Interest Margin (NIM) of 4% or more, as it indicates good financial management. For example, Bajaj Finance maintained an annualised NIM of 11.08% until December 2019.

• Safety ratings by credit rating agencies - For investors choosing company fixed deposit, it is best to check safety ratings by credit rating agencies like CRISIL and ICRA. For example, Bajaj Finance FD has ratings of FAAA by CRISIL and MAAA by ICRA, which are the highest in their respective categories. These ratings indicate lowest probability of defaults and delays by the institution, thereby assuring you of highest safety of your money.
• Company background and trust of customers - It is also best to follow news related to financial institutions, and their corporate governance. You must also look for forewarnings of potential risk, which may be highlighted as discrepancies by auditors.

The above points for consideration indicate that investing in a Bajaj Finance Fixed Deposit is a smart decision. With a deposit book of more than 20,000 crores, and 2,35,000 unique customers, Bajaj Finance has earned the trust of masses. Additionally, it is one of the only NBFC with '0 unclaimed deposits', which indicates the dedication of the company in ensuring timely payouts for Fixed Deposit.

Bank on the convenience of Fixed Deposit during market volatilities

In today's times of uncertainties, there are swinging stock indices and constant economic updates, which makes keeping a tab on the latest news quite challenging. Thus, investing in the humble fixed deposit has become more convenient, with guaranteed returns and no need for constantly monitoring your investment.

Additionally, existing Bajaj Finance customers can also avail the facility of Bajaj Finance online FD, which is an online paperless process that enables investors to book an FD from the comfort of their homes. This makes it easy to grow their savings, and lock in to the prevailing high FD interest rates.

With the Bajaj Finance FD interest calculator, you can also determine your returns before you invest. This makes it easy to grow savings, and plan your investments beforehand.

Get best FD rates with Bajaj Finance Fixed Deposit

For those who are looking for a combination of lucrative interest rates and safety of their savings, Bajaj Finance FD is a great option. This FD offers attractive interest rates of up to 7.60% for new customers, up to 7.70% for existing customers and FD interest rates of up to 7.85% for senior citizens.

To see how your wealth grows in a Bajaj Finance FD, let's assume you deposit Rs. 50,00,000 in a Bajaj Finance FD for 60 months. Based on your customer type, here's how your returns grow with this FD:

Deposit amount: Rs. 50 lakh

Tenure: 60 months

Customer type	Interest rate	Interest amount	Maturity amount	Growth in savings (in %)
New customer	7.60%	Rs. 22,11,596	Rs. 72,11,596	44.23
Existing customer	7.70%	Rs. 22,45,169	Rs. 72,45,169	44.90
Senior citizens	7.85%	Rs. 22,95,764	Rs. 72,95,764	45.91

The above results were generated using online FD calculator.

Thus, if you see the above table, you can see how your savings can grow by more than 40% by investing in this FD. You can choose tenures from 12 to 60 months, to build your corpus as per your liquidity requirements. Additionally, you can use this FD as a contingency fund, as it enables easy withdrawals and you can also choose the Loan against FD facility, to fund urgent needs during emergencies.

Hence, now is the right time to lock in to these prevailing high interest rates and safeguard your savings. Make a smart investment choice with Bajaj Finance Fixed Deposit, and watch your savings grow.