Know about the Finance and Investments Terms

A Fixed Deposit investment is where a lump sum amount is deposited by an investor. It is one of the safest forms of investment. Fixed Deposits have been one of the most sought after avenues when it comes to safe investment with considerable returns. There are three factors which are crucial when it comes to fixed deposits investment: 

1. The Rate of Interest: The rate of interest is the primary component when it comes to fixed deposit investment. It is the most important feature as the interest will determine the income that you earn at the end of the tenure. The rate of interest offered by Non-Banking Financial Companies (NBFCs) is more as compared to the banks. Furthermore, NBFCs offer much more flexibility than banks. 

2. Tenure: A period for which the investment is set to be locked-in. Banks offer a flexible fixed deposit option as there are options to invest from 1 month to 60 months. However, NBFCs are more stable when it comes to this and offer higher returns on the investment. Tenor that they offer ranges between the periods of 12-60 months. 

3. Maturity: The maturity of the investment refers to the date, wherein, the invested amount will complete its tenure. 

The amount invested in the fixed deposit is often locked. Thus, once invested it cannot be withdrawn. In case if an investor decides to withdraw, the benefits on the rate of interest will not be offered. 

Benefits of Fixed Deposit Investment with an NBFC:

• The Higher Rate of Interest: NBFCs offer a higher rate of interest  on FD as compared to other service providers. The rate of interest varies among the lenders. However, not many are as good as the one offered by Bajaj Finance. 

• Accumulation of Savings: Over a period, your investment will accrue a high rate of interest which will improve your savings enormously. The surplus amount that you have invested in fixed deposit will yield high returns in future. 

• Liquidity: Many investors doubt the liquidity offered under fixed deposit. However, FDs are quite flexible and more so if it is availed from an NBFC. There are various options that are provided to make a fixed deposit more flexible. Yes, it is true that withdrawing of the amount before maturity is discouraged but there are services such as the overdraft facility and flexi-deposit which makes fixed deposit quite flexible. 

• Risk-Free Investment: There are various investment options that you can choose from. Many people doubt the stability offered by an NBFC. However, that is not the case with every NBFC; few reputed NBFCs are a go-to-option for most of the investors as they offer better services and more flexibility. 

• Steady Income Source: The most attractive part about availing a fixed deposit service from an NBFC is that if you opt for non-cumulative FD, then you can earn periodical interest. The rate of interest can be earned and can be utilised in daily expenses such as paying bills, children’s fees, etc. 

Furthermore, to calculate the returns, you can use an FD Calculator. A fixed deposit calculator will help you determine the rate of interest that you will earn if you invest for so and so period. Determining the rate of interest has become quite easy as you just need to input certain variables and you get the probable earnings through interest instantly. There is also a slider available on the page which you can use to change the values.