Fixed Deposit Account
Banks and non-banking financial institutions (NBFCs) offer investment instruments called fixed deposits (FDs). FDs are a type of term deposit in which money can be deposited at a higher interest rate than a savings account. The money in an FD can be invested for between 7 days and 10 years at a fixed interest rate.
Features of a Fixed Deposit Account:
- It allows you to earn interest for a fixed period.
- Flexible tenure up to 10 years.
- There is no cap on the maximum deposit.
- Additional interest rates and other benefits for senior citizens.
- The capability of earning more interest than an FD savings account
- Only a one-time lump sum deposit is allowed in an FD
- TDS is applied to the interest on FDs
- Flexibility in the deposit amount and tenure for investors
- Up to Rs.1 50,000 of tax deduction under Sec 80C.
However, the interest rate for fixed deposits is often asked. This article will try to answer this question. Please read along.
What is the interest rate for a fixed deposit?
When a person invests his surplus funds in an FD, the FD provider offers him a fixed interest rate on that fund, called the interest rate on a fixed deposit. You may earn interest on fixed deposits according to to the applicable terms and conditions of the bank or NBF, Corr you can choose. However, this interest rate remains the same for the entire FD tenure, whether 7 days or 10 years. Apart from the choice of provider, below are the factors on which interest rate for fixed deposits depends:
- Your principal amount or deposit: High interest comes from high deposits.
- Deposit tenor: The Longer the tenor, the higher the FD interest rates.
- Type of deposit (Cumulative or non-cumulative): Cumulative FDs are preferred for greater interest.
- Frequency of interest payout: You can compound your interest per monthly, quarterly, half-yearly, and or annually with Bajaj Finance Fixed Deposits. However, compounding your FD interest rates frequently might decrease the amount of interest you earn.
- Type of customer Senior citizen, new or existing customer): FD interest rates for senior citizens are always higher than regular customers. For instance, Bajaj Finance Fixed Deposits offer an additional 0.25% senior citizen FD rate.
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Calculation of Interest on Fixed Deposit
By using the following formula, we can do all the calculations manually and estimate interest on FD:
- A = P * (1+ r/n) ^ n*t, where, Interest earned amount = A – P and
- A Stands for Maturity
- P stands for Principal or investment amount
- r stands for rate of interest
- t stands for tenure
- n stands for Compounded interest frequency
With so many factors to consider, the calculation of FD interest becomes laborious. To help you save time and efforts Bajaj Finance provides you with the facility of FD maturity calculator.
What is the Bajaj Finance FD maturity Calculator?
Bajaj Finance FD maturity calculator is an online tool for estimating your overall FD returns and interest earned during maturity. Calculating the sum is easy and hassle-free.
All you have to know is the interest rate for a fixed deposit, your deposit amount, your type of FD: cumulative or non-cumulative, and lastly, the amount of the investment. Then, you can calculate your overall FD returns in a few minutes.
Here is the table by which we can collate regular and senior citizen FD rates.
With CRISIL’s FAAA/Stable rating and ICRA’s MAAA (stable) rating, your investments in Bajaj Finance FDs are never at risk. Apart from the highest FD interest rates in Indi, as shown in the table, Bajaj Finance FDs offer numerous benefits such as online application of FDs, the facility of loans against fixed deposits, premature withdrawal,l, etc.
So, start investing in Bajaj Finance Fixed Deposits with a minimum deposit of Rs. 25,000 and enjoy interest rates up to 7.85%.
Also, you can utilize the Bajaj Finance FD Calculator to easily comprehend which banks or NBFCs are providing the best interest rate per your tenure choice and thus compare and choose the best.
What is the interest rate for fixed deposits in a post office? Look at the table below for post office FD rates for different tenures.
Summing up, we hope this articlewilll answers your question of the interest rate for fixeddepositst.
