Use An FD Calculator Monthly Interest Tool To Determine The Tax Impact On Your Interest Income

fixed-depositFixed deposits have remained an ideal option for those who are looking for an investment that provides good returns along with the safety of invested capital. The RBI has cut down the repo rates significantly in 2020 and as a  result, the bank FD rates have also dropped quite a bit.

The post office’s current interest rate has also been reduced in recent times. Therefore, you might think that whether it is the right time to invest in an FD or not. There is no need to worry as there are still many ways through which you can earn substantial returns by investing in an FD

Tax-saving FDs

Tax-saving FDs are offered by most of the leading banks of India. Their interest rates vary from 5 to 6% which means that they are slightly better than bank FD rates.

Also, they allow you to claim deduction up to Rs. 1.5 lakhs. The lock-in period of tax-saving FDs is 5 years and you cannot opt for premature withdrawals. Also, the higher interest rate might not make much of a difference as you cannot invest more than Rs. 1.5 lakhs in a financial year.

Select the right tenor

If you are looking to invest in a long term FD, then it might not be the right time for that. However, you can split your corpus and invest it into several short term FDs of different tenors and types.

It will not only allow you to invest your returns at a higher rate whenever the fixed deposit rates go up again but you will also get more liquidity options that might help you in times of financial crisis. 

Explore FD rates 

If you don’t want to divide your deposits into multiple FD schemes then you will need to explore the current FD rates to find the highest FD rates in India. To do that comfortably, you can use an FD calculator that can be found on the websites of most banks and finance companies nowadays. 

Bank FDs provide an interest rate above 5% only if you choose a longer tenor. As compared to them, some NBFCs offer better-fixed deposit interest rates. Bajaj Finance is offering an interest rate of up to 6.85% that is one of the best FD rates in India right now.  

It allows you to pick a tenor between 12 and 60 months as per your financial plans. Moreover, an FD calculator is provided on its portal to compare various FD plans and to calculate the FD returns accurately. 

For instance, if you invest Rs. 30 lakhs in this FD for 5 years then you will earn surplus returns at maturity. The returns applicable to various customer categories are given in the below table:

Customer type Amount  Tenor  Interest Rate Interest  Maturity amount
Senior citizen Rs. 30,00,000 5 years 6.85% Rs. 11,78,245 Rs. 41,78,245
Regular citizen (offline investment) Rs. 30,00,000 5 years 6.6% Rs. 11,29.253 Rs. 41,29,253
Regular citizen (online investment) Rs. 30,00,000 5 years 6.7% Rs. 11,48.999 Rs. 41,48,999

 

Bajaj Finance FD enables you to invest in multiple FDs at a time through its multi-deposit facility. For that, you only need to select the tenor and FD plans of your choice and a single cheque would be sufficient to invest in all the deposits at once.

Also, if you are a senior citizen then you are eligible for a 0.25% extra interest rate and if you are non-senior then you can use its online FD form to get a 0.10% additional FD rate. Moreover, its FDs have received the highest ratings for safety and stability by credit rating organizations like CRISIL and ICRA. It means that you don’t have to think about the security of your deposits while investing in Bajaj Finance FD.

As bank FD and post office FD rates are not as high as before, you might need to think of better investment ideas to earn substantial returns via FDs. To avail a tax exemption of up to Rs. 1.5 lakhs, you can invest in a tax-saving FD. Avoid investing in a long term FD as you will not be able to latch on to a higher interest rate when the FD rates go up again. Also, you can explore the highest FD rate by using the FD calculator available on the websites of banks and finance companies.

Currently, Bajaj Finance FD is offering interest rates as high as 6.85%. It enables you to pick a tenor from 12 to 60 months as per your choice and you can use its multi-deposit feature to invest in multiple FDs without any issues. This FD scheme is also safe as it has received the highest ratings for stability and safety by credit rating organizations like CRISIL and ICRA.

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