Tag: bajaj finance fixed deposit

High interest rates make Bajaj Finance FD the ideal investment avenue for one’s Diwali bonus, BFSI News, ET BFSI

Personal Finance

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Pune (Maharashtra) [India], November 3: The commencement of Diwali is accompanied by the joy of receiving one’s Diwali bonus. With the much-awaited Diwali bonuses being credited widely, it can be tempting to splurge and treat oneself to some extravagance. Still, it would be a more prudent choice to invest a portion of one’s hard-earned income.

For working professionals, saving and investing should be the top priorities for budgeting their earnings. This is one reason why one must actively seek out better ways of investing their money. Amidst the sea of uncertainties and volatile market movements, the fixed deposit has proved to be a safe harbour for investors. Bajaj Finance is one such financier that offers investors the dual benefit of high FD interest rates along with deposit safety.
Here’s why one should invest in this instrument to yield high risk-free returns this Diwali:
Benefit from high FD interest rates

Bajaj Finance offers one of the highest FD interest rates, up to 6.50%, along with an extra rate benefit of 0.10% p.a. for online investors. Senior citizens get an additional rate benefit of 0.25% p.a. irrespective of the mode of investment.

Consider an example where an individual invests Rs. 2,00,000 choosing a 5-year tenor in a Bajaj Finance online FD, the table shows the expected returns at maturity.

Loan against fixed deposit for cash crunches

Bajaj Finance Fixed Deposit offers a loan against the FD facility to address emergencies. This way, investors will not have to break their FD and thus, benefit from accumulated interest. The maximum loan amount one can avail of is 75% of the FD value.

Online FD calculator to estimate returns

To make financial planning simple, Bajaj Finserv gives free access to an online fixed deposit calculator. With it, investors can determine the returns they’ll earn at maturity. One needs to select the investment amount and tenor to get the results.

Easy online application process

Amidst all the celebrations, investors can kick-start their investment journey from the comfort of their homes. Booking an FD with Bajaj Finance is now easier than ever with an end-to-end paperless and digital process. One has to fill an online form and submit a few essential documents to start investing. Investing online can fetch investors aged below 60 years an additional rate benefit of 0.10% p.a.

Highest safety and credibility

Market-linked investments may offer high returns, but one must keep a close eye on them to shield them from fluctuations and capital loss. Fixed deposits, in this case, are incredibly safe, owing to their non-equity-linked nature as opposed to mutual funds and stocks. Moreover, Bajaj Finance FDs come with the highest ratings of MAAA and FAAA from ICRA and CRISIL, ensuring that their savings grow safely. This way, investors can be confident that their earnings are in safe hands.

Investors can consider investing their bonuses in a Bajaj Finance Fixed Deposit to grow their savings without worrying about market uncertainties.



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Why Bajaj Finance FDs are a safe option

Personal Finance

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If you are a fixed income investor in search of higher rates, and are comfortable going beyond bank fixed deposits, then NBFC deposits are an option you can consider.

Many NBFCs (non-banking financial companies) are offering higher rates than most private and public sector banks on fixed deposits of comparable tenures, of course, for the higher risk they entail.

However, unlike bank deposits that are insured for an amount up to ₹5 lakh by the Deposit Insurance and Credit Guarantee Corporation, NBFC deposits enjoy no such protection.

It therefore, makes sense to restrict yourself only to the deposits of NBFCs with strong financials.

Today, interest rates are at near bottom and are expected to go up, though not anytime soon.

The RBI left the repo rate unchanged yet again in the latest monetary policy review on August 6, 2021.

Two-year fixed deposits, that offer better rates than lower tenure deposits without locking-in your money for too long, can therefore, be a good choice.

What’s on offer

Bajaj Finance offers 6.10 per cent per annum on its two-year cumulative FD and non-cumulative FD (with an annual interest pay-out option). This is better than the 5.1 – 5.2 per cent and 5.0 – 5.5 per cent respectively offered by several public and private sector banks.

The Bajaj Finance FD rates are a tad lower than those offered by other NBFCs such as Mahindra & Mahindra Financial Services (6.2 per cent) and Shriram Transport Finance (6.54 per cent) on their similar deposits.

But Bajaj Finance’s strong financials, among the best in the sector, offer ample comfort to investors.

The deposits enjoy the highest ratings — CRISIL’s FAAA/Stable and ICRA’s MAAA (stable).

Senior citizens, that is, those aged 60 or above get an additional 0.25 per cent on the Bajaj Finance FD. Those booking an online FD get an additional 0.10 per cent. This does not apply to senior citizens. You must invest a minimum of ₹25,000 in the FD.

Strong financials

Bajaj Finance has a well-diversified loan book spread across consumer, rural, SME and commercial loans.

As of June-end 2021, consumer loans accounted for 44 per cent of the lender’s loan book of ₹1.6 lakh crore. With a presence in over 3,100 locations, the non-bank lender is geographically well-diversified too. The loan book registered a year-on-year growth of 15 per cent growth in the June 2021 quarter.

Adequate buffer

As of June-end 2021, Bajaj Finance’s net NPAs (non-performing assets) were only 1.46 per cent.

While this is higher than the 0.5 per cent in the June 2020 quarter, the previous year’s numbers are not comparable due to the then ongoing moratorium.

Also, Bajaj Finance’s capital to risk weighted assets ratio (CRAR) of 28.57 per cent is well above the mandated 15 per cent, providing adequate buffer against any future bad loans.

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