Make The Most Of High Fixed Deposit Rates To Secure Your Family’s Future

Are you looking for a secure investment that offers you both long -term and short- term benefits? An option which is risk-free and also helpful in enhancing your wealth to secure your family’s future? You can find multiple instruments to invest in, but the priority should be given to investments that are risk-free and offer a high return on investment.  Fixed deposits are one of the best ways under these criteria to secure your family’s future.

The Reserve Bank of India increased the repo rate in the third quarter of fiscal 2018-19. This led to an increase in interest rates across banks and NBFCs.With increased FD interest rates, you must make the most of fixed deposit investment strategies to achieve maximum benefits for your portfolio. Fixed deposits have great financial benefits to offer for your family, apart from being a risk-free investment. FDs offer an attractive rate of return which varies according to the term of maturity. The longer the maturity timeline, the higher the return.

How can high fixed deposits rates help secure your family’s future

Each feature of a fixed deposit, when used smartly, can help multiply the return or reduce the tax burden. This will, in turn, contribute to your financial goals and secure your family’s future. Let us see how each feature works.

  • High interest rates help with quick corpus –Company fixed deposits like Bajaj Finance FDs offer higher interest rates as compared to bank FDs. The interest rate has been hiked for Bajaj Finance Fixed Deposits up to 8.75% for regular customers and an additional 0.35% for senior citizens. You can earn an extra 0.25% on each renewal. This deposit with a minimum amount of Rs 25,000 can help you build a profitable corpus over a period of time.

Similarly, in banks, you can create fixed deposits with differing tenors, and though fixed deposits are subject to tax, all you need to do is file 15G and 15H forms to avoid TDS.

  • Variable tenors can be planned to fulfill specific goals– Fixed deposits come with different tenor terms making it quite easier for investors to invest according to their preference. You can choose tenors depending upon your financial goals. E.g., invest in a 12-month FD is you plan to give a down payment for buying property.
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  • Power of Compounding to bring high returns– This concept multiplies your deposit amount periodically and leaves an interest earned more than simple interest. In a high interest rate regime compounding will work wonders for your returns.

Calculating the rate of interest is quite simple, all you need to do is apply the formula to check what you will earn at the maturity.

Suppose you invest a sum of Rs 30,000 for a term of 3 years with a rate of interest being 9.1%

A= Rs 30,000(1+9.1/4/100) ^ (4*3)

The total amount that you will earn at the end of the 1st year: Rs 32,730, 2nd year Rs 35,708, 3rd year be Rs 38,957. You can also use Fixed Deposit Return Calculator to calculate the maturity amount and compare different FD schemes.

  • Laddering helps ensure constant inflow –You can ladder multiple fixed deposits in a successive manner to achieve regular inflow of interest one after the other. This practice can help you plan for your future investment goals. Combined with a high-interest offering and cumulative FD option, your investment can enjoy high cash inflows.

As seen above, fixed deposits carry benefits that can certainly help you secure your financial security in the long run if invested wisely. With increasing interest rates, you should try the above tips to create a well-earning portfolio. Additionally, if you choose highly stable and credible FDs like Bajaj Finance Fixed Deposits which are rated with ICRA’s MAAA (stable) rating and CRISIL’s FAAA/Stable rating, your investments are not affected by market sentiments. You can even use FD investments for retirement planning. Longer tenor fixed deposits with a higher interest rate can build a corpus for future financial independence.

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