Back in 1964, Bob Dylan's song 'The Times They Are a-Changin' captured and encapsulated the-then inchoate sentiment that took over America. The phrase is much more relevant amid systemic changes happening in India today, albeit for different reasons.
One of the major differences between the West and the East for decades has been family values. While children were urged to move out and be independent by the time they turned 18 in the West, children in Asia, and especially in India were indoctrinated with the values of filial piety.
Today, however, it is the senior citizens that prioritize independence. Individuals in their 40s and 50s start looking for safer avenues to park their corpus, and give greater weightage to capital safety over capital appreciation. Considering retirement would mark the end of their working years, individuals start planning for life after retirement, and different ways in which they can maintain their lifestyle.
A survey conducted by SEBI in 2017 showed that more than 95 percent of Indian households across the urban and rural areas preferred to park their corpus in bank deposits, with less than 10 percent opting to invest in stocks or mutual funds.
Fixed deposit has long been the best choice for conservative investors, not only because they are a safe haven to park their money, but also because by investing corpus wisely, investors can expect a steady, regular income after their retirement, making them the ideal investment instruments for senior citizens. FD also minimizes risk, as it isn't influenced by market movements; this, in conjunction with assured returns, make fixed deposits one of the most popular options for senior citizens.
Benefits of Investing in Bajaj Finance FDs
Most of the financial institutions in India offer special interest rates to senior citizens, in an effort to incentivize investors for parking more corpus. One of the most popular options today is the Bajaj Finance fixed deposit scheme, as it offers a myriad of benefits over FDs offered by other NBFCs and traditional banks. Not only do Bajaj Finance FDs provide some of the highest FD interest rates in India, but they are also backed by the highest stability ratings -- FAAA by CRISIL, and MAAA by ICRA, cementing the institution's place as one of the most attractive and sought-after options for senior citizens to park their money.
Bajaj Finance also lets individuals invest in fixed deposits with a lumpsum amount as low as Rs. 25,000. Alternatively, one can start investing with just Rs. 5,000 per month through Systematic Deposit Plan (SDP), and build corpus over a long period. This is beneficial for investors of all ages, as one needn't procure large sums of cash to start investing in a fixed deposit scheme.
Another benefit offered by Bajaj Finance FDs is flexible periodic payouts. Senior citizens can either opt for cumulative fixed deposits, with the payouts collected at maturity, or non-cumulative fixed deposits, where the interest is paid out at regular intervals. Non-cumulative fixed deposits can provide a steady, regular income, which can be used to meet daily expenses. Investors can either opt for monthly payouts, or payouts on a quarterly, half-yearly or on an annual basis.
To make the application process simple and hassle-free, Bajaj Finance also lets individuals open an FD account online. Furthermore, Bajaj Finance online FD offer 0.10 percent higher interest rate as compared to the rates offered if you open the FD account offline. For senior citizens, Bajaj Finance provides an additional 0.25 percent interest rate, which totals up to 7.35 percent for selected tenures. Additionally, Bajaj Finance offers flexible tenures, ranging from 12 months to 60 months, and you can choose a tenure that fits your requirements and needs.
Let us assume that you have parked Rs. 30,00,000 in Bajaj Finance non-cumulative FDs, for a period of 3 years. Here is how much you can expect in interest payouts, depending on the payout period you choose.
|Fixed Deposit Type||Payout Period||Investment (Rs.)||Interest Rate (%)||Interest (Rs.)|
|Bajaj Finance Senior Citizen (Online or offline)||1 Month||30,00,000||7.11||17,775|
|Bajaj Finance Senior Citizen (Online or offline)||3 Months||30,00,000||7.16||53,700|
|Bajaj Finance Senior Citizen (Online or offline)||6 Months||30,00,000||7.22||1,08,300|
|Bajaj Finance Senior Citizen (Online or offline)||1 Year||30,00,000||7.35||2,20,500|
Depending on the amount you invest, along with your preferred tenure, you can calculate your returns by using the Bajaj Finance FD return calculator.
Alternatively, if you opt for cumulative FDs, here is how much corpus you can amass at maturity. We have also compared these returns with those offered by other NBFCs and traditional banks on average.
|Fixed deposit type||Investment amount (Rs.)||Interest rate (%)||Interest (Rs.)||Maturity amount (Rs.)|
|Bajaj Finance (Senior Citizens)||30,00,000||7.35||7,11,311||37,11,311|
|Other NBFCs (Senior Citizens)||30,00,000||7.0||6,94,318||36,94,318|
|Traditional banks (Senior Citizens)||30,00,000||6.70||6,61,773||36,61,773|
Thus, Bajaj Finance Senior Citizen FD offers greater returns as compared to other NBFCs and traditional banks on average, while providing several other benefits, including flexible periodic payout terms, which is particularly helpful for senior citizens. Furthermore, you do not have to physically visit the institution to open an FD account, as you can apply offline and avail convenient doorstep services, which ensures greater comfort and convenience.