Fixed deposit investors can now rejoice as Bajaj Finance has raised its rates by up to 40 basis points. The non-banking finance company (NBFC) will now offer 8.35% for a 44-month deposit, with senior citizens earning even more at 8.6%, while those opting for a 36-60 month tenure can earn 8.05%. The move is expected to benefit investors, particularly those who prefer conservative investment options, including senior citizens who rely on these deposits as a source of regular income.
Financial planners have welcomed the move, noting that with interest rates near a peak, these high rates are good for all classes of investors. Unlike debt mutual funds, where returns are variable and not guaranteed, fixed deposits are simple-to-understand products, and investors get what is promised to them. This makes them a favourite amongst conservative investors and senior citizens, many of whom depend on such deposits to earn an income and run their monthly expenses.
Even for rich investors, these fixed deposits could prove to be a worthwhile investment. With mutual funds no longer offering long-term capital gains tax and indexation benefits in debt schemes, financial planners believe these deposits offer a reliable option. After paying a tax of 30%, investors can earn a post-tax return of 5.77%, which also beats inflation and is better than other competing simple products. Tax-free bonds, which are scarce in the markets now, could yield 5-5.5%.
The move by Bajaj Finance is seen as an effort to attract more deposits and expand its customer base. With the current economic climate, depositors are looking for stable and predictable investment options, and fixed deposits fit the bill. The NBFC’s increased rates are likely to make it a more attractive option than other financial institutions that offer lower returns on their fixed deposits.
Bajaj Finance is a subsidiary of Bajaj Finserv, which is one of the largest financial services companies in India. The company has a strong track record of providing innovative and customer-centric financial products to its customers. In addition to fixed deposits, the company offers a wide range of financial services, including personal loans, home loans, business loans, and insurance products.
The NBFC’s decision to offer higher rates on its fixed deposits comes at a time when the Reserve Bank of India (RBI) has kept its benchmark interest rates unchanged. The central bank’s decision to maintain the status quo on interest rates has led to other banks and NBFCs also hiking their deposit rates. This move by Bajaj Finance is likely to spark a trend among other financial institutions to offer higher rates on their fixed deposits.
The increased rates on fixed deposits are also expected to benefit the overall economy. With more deposits flowing into the banking system, banks and NBFCs will have more funds to lend to businesses and individuals. This could lead to an increase in economic activity, which is critical for India’s post-pandemic recovery. Financial experts believe that investing in fixed deposits is a wise choice, especially for conservative investors who are risk-averse. Fixed deposits are simple to understand, and the returns are guaranteed, making them a popular choice among investors of all ages. With the recent hike in FD rates by Bajaj Finance, investors can earn attractive returns on their investments, which is great news for those who depend on fixed deposits to earn a regular income.
In conclusion, Bajaj Finance’s decision to raise its fixed deposit rates is a welcome move for investors looking for stable and predictable investment options. The move is likely to benefit depositors, senior citizens, and the overall economy. Financial planners believe that with interest rates near a peak, these high rates are good for all classes of investors.
