Fixed Deposit offered by Bajaj Finance Limited, the lending and investment arm of Bajaj Finserv, is a low-risk financial instrument. Investors can easily invest in a FD and grow their savings at a fixed rate of interest, which is higher than interest rates offered by savings accounts. The convenience of investing along with the safety of their deposit can help them plan their short-term and long-term goals easily.
Whereas, a Recurring Deposit is for those investors who do not have a lump sum amount to meet short-term goals. Hence, depositing a small share of their income to the RD account every month serves the purpose well. It allows its investors to earn fixed interests on the amount invested at frequent intervals until the investment matures.
The primary difference between both FDs and RDs is that the former is a one-time investment for a fixed duration, while the RD involves periodic investments of a fixed amount over a fixed period. However, when one compares a Recurring Deposit with company deposits like Bajaj Finance FD, the latter offers a host of benefits as elaborated in the below table-
|Parameter||Recurring Deposit||Bajaj Finance Fixed Deposit|
|Kind of deposits||Monthly installments made towards the deposit for a fixed tenure.||One-time investment made in a lump sum installment.|
|Tenure||Can invest from 6 to 120 months.||Can invest from 12 to 60 months.|
|Interest payout frequency||Receive interest payout at maturity.||Option to receive interest payout at maturity, or periodically (monthly, quarterly, half-yearly, annual).|
|Auto renewal option||The option to auto-renew is unavailable.||Can auto-renew FD with additional rate benefit of 0.10%.|
|Tax saving option||No option to save tax.||Allows to save tax on 5-year FD.|
|Minimum deposit||There is no minimum deposit in a RD.||The minimum deposit required to invest in a Bajaj Finance Fixed Deposit is Rs. 25,000.|
From the above table, it can be deduced that Bajaj Finance FD offers higher flexibility in terms of payouts at maturity and ease of investment. While Recurring Deposit (RD) works best for individuals seeking monthly savings option, Bajaj Finance Limited also offers Systematic Deposit Plan (SDP) that helps in boosting savings on a monthly basis. SDP offers the convenience of monthly savings with assured returns, which enables investors to build their corpus with contributions as low as just Rs. 5000 per month.
On the other hand, for those looking for a one-time deposit and a convenient savings option, investing in a Bajaj Finance Fixed Deposit can be a great option, as they can reap the benefits of profitable returns.
For those looking for other monthly investment option Bajaj Finserv offers other options like Systematic Deposit Plan (SDP). Unlike FD, here investors need to deposit a small sum on a monthly basis, so every deposit is treated as a new FD, which earns interest as per the prevailing rate at the time of deposit.
Under SDP, investors can choose to save through any of the two variants –
Monthly Maturity Scheme – With this plan investors can invest in 6 to 48 deposits and the tenure they choose gets applied to all the subsequent deposits. They can also choose tenures ranging from 12 to 60 months for each of their deposit, and the maturity proceeds can be received every month, as per the chosen tenure.
Single Maturity Scheme – This plan works best for those who are looking to raise a lumpsum amount on a single day. Here, investors can start with small deposits monthly, but can receive their maturity proceeds on a single day.
There’s a common application form for both schemes.
For those looking to decide whether to invest in a Fixed Deposit or Systematic Deposit Plan offered by Bajaj Finance limited, here’s a comparison table to choose the best savings plan-
|Parameter||Fixed Deposit (FD)||Systematic Deposit Plan (SDP)|
|Kind of deposits||Deposit a one time fixed amount for a fixed tenure.||Deposit a fixed amount starting Rs. 5000 every month, for a fixed tenure.|
|Minimum deposit amount||Minimum lumpsum amount of Rs. 25,000 is required to start an FD.||Minimum deposit of Rs. 5000 per month is required to start an SDP.|
|Tenure||Investors can invest for a tenure ranging from 12 to 60 months.||Under Monthly Maturity Scheme- Tenure applicable for every deposit can be chosen from 12 to 60 months. Whereas, under Single Maturity Scheme- Tenure for first deposit ranges from 12 to 60 months and tenure for subsequent deposits is regulated to mature on single day.|
|Interest rate||Interest rate remains fixed for lumpsum deposit, until end of tenure.||The interest rate prevailing on date of each monthly deposit will be applicable to that particular deposit.|
Systematic Deposit Plan (SDP) works best for individuals looking to grow their savings with small monthly contributions. While, Fixed Deposit is a great choice for those looking to invest a one-time lumpsum amount.
Both new and existing Bajaj Finance customers looking to grow their savings can get high FD & SDP rates of up to 7.10%, with an additional interest rate benefit of 0.10% on investing online. This deposit works best for senior citizens who get a 0.25% rate boost on FD interest rates of up to 7.35%.
In addition to lucrative returns, Bajaj Finance promises the highest safety of deposit with safety ratings of FAAA by CRISIL and MAAA by ICRA, which are the highest in their respective categories. This company is also one of the only NBFCs with ‘0 unclaimed deposits’, which indicates timely payments and a default-free experience for customers.