As an investment instrument offered by banks and NBFCs (non-banking financial companies), Fixed Deposit is a great way to grow your savings with utmost safety. It is one of the most preferred avenues that enables you to deposit a lump sum amount with your financier, and choose a tenure as per your convenience. On completion of the pre-decided tenure, your deposit starts earning an interest, throughout the chosen duration, as per the interest rate at which you locked in your deposit.

Once your investment amount has been locked in at a specific interest rate, it remains unaffected by further changes in interest rates or market fluctuations. Thus, you can get guaranteed returns on your deposit, and you can choose to get your interest on a periodic basis, or at maturity. Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.

Features of Fixed Deposit

The returns on your deposit are assured and remain unaffected by market fluctuationsFD interest rates offered by NBFCs are higher than FD rates offered by banksFixed Deposit can be easily renewed, and you can also reap additional rate benefits on renewing your depositsTax is deducted at source, from interest on Fixed Deposit as applicable, as per the Income Tax Act, 1961.

Benefits of Fixed Deposit

Fixed Deposit is one of the safest investment instruments, which offers highest stabilityReturns on Fixed Deposit are assured, and there is no risk of loss of principalYou can opt for periodic interest payouts, to help you manage your monthly expensesThere is no effect of market fluctuations on your Fixed Deposit, which ensures greater safety of your investment capitalSome financiers also offer higher FD interest rates for senior citizens

Taxability on Fixed Deposit

The interest earned from Fixed Deposit is taxable. The tax deducted at source on FD can range from 0% to 30%, depending on income tax bracket of the investor. Financiers deduct 7.5% TDS if interest earned is more than Rs. 10,000 in a year, only if your PAN details are available with them. However, in case your PAN details are not provided to your financial institution, 20% TDS will be deducted.

If your total income is below the minimum tax slab of 10%, you can claim a refund of the deducted TDS. You can also avoid the deduction by submitting Form 15G to your financial institution, and submitting Form 15H if you’re a senior citizen. If you fall in the higher tax bracket (20% or 30%), you would have to pay extra tax over and above the TDS deducted by your NBFC or bank.

Provident Fund is a compulsory, government-managed retirement savings scheme for employees, who can contribute a part of their savings towards their pension fund, every month. These monthly savings get accumulated every month, and can be accessed as a lump sum amount at the time of retirement, or end of employment. Since the provident fund money consists of a large chunk of savings, it can be used to grow your retirement corpus easily.

Types of Provident Funds

There are mainly three different types of PFs, which include the following:The General Provident Fund is a type of PF which is maintained by governmental bodies, including local authorities, the Railways and other such bodies. Thus, these types of PFs are mainly defined by the government bodies.

The Recognized Provident Fund is the one which applies to all privately-owned organizations that contain more than 20 employees. Moreover, holding a rightful claim to the PF associated with your organization, you will be given a UAN or Universal Account Number. This enables you to transfer your PF funds from one employer to another whenever you move from one occupation to another.

The Public Provident Fund is defined by the voluntary nature of investment on the part of the employee. The PPF is also associated with a minimum deposit of INR 50 and a maximum amount of Rs. 1.5 lakhs. This PF also comes with a pre-determined maturity period of 15 years, only after which any form of withdrawal can be done from the account.

While Provident Funds are low-risk investment avenues that can help you grow your money easily, it is important to invest the PF funds in smarter investment avenues that enable you to grow your funds furthermore. Bajaj Finance Fixed Deposit is a preferred investment avenue for setting aside your funds, to multiply them.

How To Get Maximum Returns From Fixed Deposit?With steady returns over a fixed period, Fixed Deposits offer stability with better returns. When you choose Fixed Deposit with higher interest rate, you can boost your returns easily.

For those looking to maximise their returns with Fixed Deposit, here are a few steps to undertake:Plan your investment strategyInvesting in FD alone is not enough to gain more returns, as you need to know how to manage your deposit well. Once your deposit reaches the maturity date, you can consider re-investing, especially as many financial institutions offer higher FD interest rates on renewing investments. Bajaj Finance also offers auto-renewal facility, so you can choose to renew your deposits, while you’re booking them.File your returns on timeIt is important to file your returns on time, and be aware of the latest changes or modifications in the tax laws for FD returns. You can also avail tax exemptions, if you file your returns with Forms 15H or 15G. If you fall in a low-income bracket, you can also receive tax exemption.Ladder your FDs for liquidity and tax benefitsMake the best use of your funds by dividing a single corpus over multiple FDs different tenures. This can help you see your fixed deposits as a financial backup, which help you fulfil your financial requirements easily. This also enables you to gain tax benefits, as you have multiple maturity dates.Choose Cumulative FD for funding long-term goalsCumulative FD enables you to grow your corpus over the tenure, as you get extended benefits of compounding. However, non-cumulative FD helps you gain regular payouts, which makes them best-suited for retired individuals seeking periodic income.

These simple steps can go a long way in helping you maximise gains from your FD scheme, to reduce deductions. You can invest in Bajaj Finance Fixed Deposit, for better returns that help you grow your corpus. You can choose your tenure, avail periodic payouts and earn more returns when you renew your investment. If you’re planning to calculate your maturity amount before you invest, consider using FD return calculator and book your FD today, with an end-to-end online procedure.

Fixed Deposit (FD): Taxable or Tax Free

Tax deducted at source, or TDS, is interest directly deducted from people when they receive payments, salaries, fees, commissions, rent or income from any other sources. The interest earned from Fixed Deposit is taxable, as the rest of your income.

When filing your taxes, you must declare your FD under ‘Income from other sources’, depending on the taxable amount limit, as per your financier. If you deposit a large sum in your FD, tax deductions are incurred at source.

As per Section 194A of the Income Tax Act, people getting an interest amount of more than Rs. 10,000 from their fixed deposits, but were not liable to pay income tax, were also being taxed. Forms 15G/15H are for such individuals, who can furnish them for nil or lower deduction of TDS. Here’s a look at how Form 15G and Form 15H can help you:

Form 15G

– Individuals who are below 60 years of age, can submit Form 15G to their financial institutions.

Form 15H

– This form should be submitted by senior citizens, but it is important to ensure that the final tax on the estimated total income should be nil for the financial year. It is however, important to submit both these forms at the start of the year, because the interest once deducted by the financial institution cannot be refunded.

As per Budget 2018, Tax Deducted at Source (TDS) exemptions have increased to Rs. 50,000 on bank deposits. Additionally, senior citizens can seek a tax exemption up to Rs. 50,000 on fixed deposits.

When investing in a Bajaj Finance Fixed Deposit, you can get guaranteed returns with competitive interest rates. There are also different Fixed Deposit schemes to suit your convenience, and investment needs. Read on to know more about these.

Fixed Deposit for Non Senior Citizens

Deposit amount for a fixed tenure and earn interest up to 6.60%

Tenure ranges from 12 months to 60 months

Choose to get interest payout at maturity, or opt for periodic payouts

Invest online through a paperless journey, and get 0.10% additional rate benefit on investing online

Fixed Deposit for Senior Citizens

This FD is applicable for those who are above 60 years of age

Senior citizens gain 0.25% higher interest rate

Deposit amount for a fixed tenure and earn interest up to 6.85%

Tenure ranges from 12 months to 60 months

Fixed Deposit for NRIs

This FD is applicable for non-resident Indians (NRIs), Overseas Citizen of India (OCI) and Person of Indian Origin (PIO) with NRO accounts

Deposit amount for a fixed tenure and earn interest up to 6.85%

Tenure ranges from 12 months to 36 months

Payment is accepted only through cheque or RTGS/NEFT from NRO bank account.

Systematic Deposit Plan:

Make monthly deposits starting Rs. 5000 per month

Choose number of deposits ranging from 6 to 48

Tenure for each deposit ranges from 12 months to 60 months

Payment is accepted only through cheque or RTGS/NEFT from NRO bank account.

Fixed Deposit is one of the most preferred investment options that enables investors to earn assured returns on their deposit, over a specific tenure. However, the interest income you earn from fixed deposit is fully taxable.

If your total interest earnings from fixed deposit investments exceed the minimum threshold amount, your financier will deduct TDS (Tax Deductible At Source) as per the Income Tax Act, 1961.

TDS rates applicable for different customers

For Indian Resident Customers

As per announcements made by the Finance Minister, the TDS on interest earned from fixed deposit for the Financial Year 2020-21, shall now be deducted at 7.5% if the interest income exceeds Rs. 5,000 during the financial year, with effect from May 14, 2020. However, this deduction is not applicable for those depositors who have not submitted their PAN.

For Non-Resident Indian customer

As per section 195 of Income Tax Act (1961), if you are an NRI investor, TDS on interest earned from fixed deposits shall be deducted @ 30% plus applicable surcharge and cess.

TDS rate if PAN details are not provided

If your PAN details are not shared with your financier, then the TDS deducted is: 20% if you are an Indian resident 30% plus applicable surcharge and cess if you are a non-resident Indian customer

If you are an Indian resident customer, you can apply for a TDS waiver on interest earned from fixed deposit by submitting Form 15G or Form 15H (applicable as per your age), to your financier at the beginning of the financial year.

These forms include a self-declaration stating that tax on your (estimated) total income during the financial year is NIL. Therefore, no TDS will be deducted on interest earned from FD as your total taxable income is NIL.

Also, if your total income is below the minimum income tax slab, you can claim a refund of the TDS deducted.

For more information on Form 15G and 15H, please go through the link below:-

Everything You need to Know About Form 15G & Form 15H.

If you fall under the non-taxable bracket, you can claim the TDS on FD interest as refund while filing your Income tax returns.

TDS on FD interest can also be saved by creating multiple company FDs which will earn interest under Rs. 5,000 in total across a single NBFC branch.

You can submit Form 15G/H to avoid TDS deduction if you are earning less than the lowest income tax bracket.

For Company FDs, TDS deduction limit is Rs. 5,000 in a financial year

Total taxable income less than Rs. 2,50,000 does not require TDS deposit

TDS deduction limit for senior citizens is also Rs. 5,000 in case of Company FDs.

Interest on FD is fully taxable in India but can be claimed as TDS deduction under relevant sections of Income Tax Act

1. For all resident Indian investors, if the interest income earned on company FD exceeds Rs. 5000, the TDS rate is 10% (in case PAN details are provided to the financier). If PAN details are not provided to the financier, TDS deduction on FD interest is chargeable at 20%.

2. For Non-Resident Indian investors, TDS payment needs to be made at the rate of 30% plus applicable surcharge and cess.

If you are a resident Indian citizen and your interest earnings on company fixed deposit exceed Rs. 5000 in a financial year, 7.5% of the interest amount will be deducted as TDS. For example, if you earn Rs 20,000 as interest on FD, the TDS deducted will be Rs. 1,500.

With fixed interest rate and attractive returns, Fixed Deposit is one of the most preferred investment options for most investors. However, the interest you earn from Fixed Deposit is fully taxable. As per the recent Budget, TDS threshold has been raised to Rs. 40,000 from Rs. 10,000 for banks and post office deposits, while for NBFCs it continues to be Rs. 5000

Form 15G can be used to prevent TDS deduction on income, if the following conditions are met:

You are an individual (and Resident Indian) or HUF or trust or any other assessee but not a company or a firm

You are less than 60 years old

The tax computed on your total income is nil

Your total interest income for the year is less than the basic exemption limit of that year, which is Rs. 2.5 lakh for financial year 2020-21 (AY 2021-22)

For those who are above 60 years of age, Form 15H can be furnished to prevent deduction of TDS if the following conditions are met:

You must be an individual and an Indian Resident

You should be at least 60 years old

The tax computed on your total income is nil

Here’s a quick summary of the exemption limit for different individuals:

Once you’ve met the required conditions for furnishing Forms 15G and 15H, you can start filling them. Here’s are the steps you need to take:

Fill in the different fields in Form 15G and Form 15H

Attach your PAN copy with the declaration

Submit the Forms to your financier.

For those looking to avoid long queues and arduous processes, you can consider filing these forms online.

Both Forms 15G and 15H are valid for 1 year, and should be submitted to your financier at the start of the year. You must ensure that your financier does not deduct the tax, before you furnish the forms, because the bank may not be able to refund it. To get your money back, you may need to file your ITR and claim a refund of your TDS amount.

To download Form 15G or Form 15H, here’s what you need to do:

Visit the Income Tax Department website

Under ‘Frequently used Forms’, look for Form 15G or Form 15H, depending on your requirement.

Click on the PDF icon next to it and download the form. Once you’ve downloaded the form, print 3 copies of it. Sign and submit the printed documents to your financier.

Fixed Deposit (FD) is a reliable investment tool for preserving and growing savings. The rate of interest on your deposit depends on the tenure you choose, and the frequency of interest payouts.

The FD formula for calculation of interest is listed below:

Where,

A is maturity amount

P is principal amount

r is rate of interest

t is number of yearsn is compounded interest frequency

For those looking to avoid the complexities of manual calculations, there is always an option to use the online FD Calculator that evaluates your returns within a few minutes.

Using the FD calculator is very easy, and all you have to do, is to input the fixed deposit amount and tenure to calculate the amount receivable at maturity. It helps you calculate both – cumulative and non-cumulative payouts.

It is easy to use, and all you need to do is fill in details about:

Customer Type,

Type of fixed deposit

Fixed deposit amount

Fixed deposit tenure

The interest amount along with the total amount will hence, be reflected. It helps you save the manual work, and you can determine the return on your investment in no time.

To maximise the returns on your deposit, it is important to know the factors affecting your FD interest and amount, which have been listed below:

Higher deposit amount means higher interest.

Longer tenure results in higher interest.

Higher percentage of interest rate yields greater interest amount.

Cumulative FDs give better interest.

Your interest can be compounded monthly, quarterly, half-yearly or annually with Bajaj Finance Fixed Deposits. However, frequent compounding of interest rates can decrease your interest amount.

While senior citizens get an additional rate benefit of 0.25%, there is also an additional rate benefit of 0.10% for online investors, who are less than 60 years of age.

Based on your convenience, and the above factors, you can choose the tenures, payout frequencies, deposit types and mode of investment to grow your savings. You can choose to invest in a Bajaj Finance Fixed Deposit to get attractive rate of interest, which can enable you to maximise the returns on your deposit.

The maturity amount of a Fixed Deposit is based on:

Deposit amount

Tenor

Rate of interest

Frequency of interest payout

Here’s how maturity amount is calculated:

Higher the deposit, greater is the maturity amount.

Usually, FDs have a lock-in period. Longer tenor results in higher maturity amount.

Cumulative and Non-Cumulative FDs have different frequencies of interest payouts.

Higher fd rates, higher is the maturity amount.

The easiest way to calculate the maturity amount is to use an online FD Calculator and add the above-mentioned details. The calculator gives you the total maturity amount without any manual work.

When investing in a fixed deposit, the interest is compounded regularly, and you have the option to receive your interest at maturity, or on a periodic basis. For those looking for steady growth of capital, investing in a cumulative fixed deposit is a great option, as you get a lumpsum amount at maturity. The amount you receive at maturity, includes your principal amount and the total interest accumulated. The tenure for this FD can range between 12 and 60 months.

While cumulative FD enables you to get your returns at maturity, non-cumulative FD helps you fund recurring expenses as you get interest payouts periodically. You can choose to get interest payouts on a monthly, quarterly, half-yearly and annual basis.

The interest generated on the deposit is paid out on a periodic basis, in case of non-cumulative FD. On the other hand, the interest gets accrued to the principal amount and earns more interest, in case of cumulative FD. Hence, this ensures higher growth of capital when you invest in a cumulative FD.

Choosing between cumulative and non-cumulative FD can be tricky, but it is important to understand your own requirements. For those with a need to get periodic income, investing in a non-cumulative fixed deposit can be a great choice. However, if you’re looking to grow your capital over a specific period, consider investing in a cumulative fixed deposit.

Non-Cumulative Fixed Deposit is a kind of FD where the interest is payable on a monthly, quarterly, and half-yearly or annual basis. One can choose the frequency of the interest payout for a Non-cumulative FD at the time of application, which may be monthly, quarterly, half-yearly or annually.

The tenure for a Non-cumulative FD can range between 12 and 60 months. Remember, the maturity amount decreases if the interest payout frequency is higher.

With non-cumulative FD, you can look for regular interest payouts, to meet your monthly expenses. These FDs are suitable for people who need a regular income from interest payouts, such as pensioners.

As one of the safest investment options, Fixed Deposit enables investors to earn interest on their savings for a fixed tenure, and at a pre-determined rate of interest. When investing in a Fixed Deposit, you may have come across the terms – Cumulative and Non-Cumulative FD. These are two different types of Fixed Deposit, bifurcated based on how you choose to receive your interest payouts.

For those who choose to invest in a Cumulative Fixed Deposit, the interest on their deposit is compounded each year, and paid at the time of maturity. On the other hand, when you invest in a Non-Cumulative Fixed Deposit, the interest on your deposit is paid out monthly, quarterly, half-yearly, or annually, as per your requirements.

Here’s a table comparing the features of both these Fixed Deposit types, to help you understand these better:

The choice between Cumulative and Non-Cumulative depends on your investment requirements. For investors who don’t need regular cash flows, but looking to save up for long-term goals like building a nest egg for retirement, or short-term goals like funding a major expense, it is best to choose Cumulative Fixed Deposit. By investing in a Cumulative FD, such investors can raise enough money to fund their goals.

On the other hand, investors with a need for periodic income can choose to invest in a Non-Cumulative FD, where they can receive payouts on a periodic basis. The payouts received on these deposits can be seen as substitutes for regular salaries, which can help retirees fund their monthly expenses easily.

Credit ratings by agencies can help you make smarter investment choices in such cases. CRISIL is one such global analytical company that provides ratings, research, along with risk and policy advisory services. It is India’s first credit rating agency, which has pioneered the concept of credit rating in the nation.

Some of the debt instruments rated by CRISIL include loans, commercial papers, non-convertible debentures, bank hybrid capital instruments, asset-backed securities, mortgage-backed securities, bonds, certificates of deposit, etc.

CRISIL plays an essential role in helping borrowers or investors access loans or invest their money with credible financiers. Here’s a look at the role of CRISIL ratings:

As one of the nation’s first credit rating agency, CRISIL’s analysis helps in forming an opinion on the risk types that affect the relative ability of financiers to service their interest payment obligations and principal repayments.

CRISIL provides an unbiased, objective and independent opinion on the relative safety of the sum on a debt instrument.

It helps the issuers enhance the marketability of the instrument, while also ensuring a firm financial standing at any given time.

A financier’s asset quality is a measure of its ability to manage credit risks. It not only depends on the credit quality of its clients, but also on its ability to manage asset portfolio. Here’s a look at their rating criteria.

CRISIL works towards managing and controlling credit and market risks at a portfolio level, and analyses the management’s attitude towards risk and growth. Hence, CRISIL’s ratings bridge the gap between the financier and the borrower or investors, enabling them to take the right decisions.

CRISIL works towards managing and controlling credit and market risks at a portfolio level, and analyses the management’s attitude towards risk and growth. Hence, CRISIL’s ratings bridge the gap between the financier and the borrower or investors, enabling them to take the right decisions.These ratings act as an assurance that indicates the highest degree of safety for a fund. The ratings are made, based on information gathering, analysis and meetings with the Management.

CRISIL’s credit ratings on debt obligations indicate the likelihood of the obligations being repaid in time; along with an opinion on the probability of default on the instruments. The ratings come in different categories for long-term, short-term, structured finance, corporate credit ratings, fixed deposit ratings, and financial strength ratings for insurance companies.

When it comes to investing in Fixed Deposits, we tend to look for lucrative options and high returns. This makes us gravitate towards financiers who offer higher interest rates. However, there is an additional risk, when it comes to investing in certain company deposits, due to lack of government backing.

Hence, depositors risk losing the money they invest. However, CRISIL Ratings can help you take the right decisions, as you can determine the rating quality and opt for the right financier. CRISIL ratings enable you to sieve through the seemingly attractive offers, available across different companies. You can use these ratings as a benchmark to make a comparative analysis amongst various players in the market.

There is no direct impact of CRISIL ratings on the interest rates of a Company FD, but usually investors take their investment decisions, based on the credibility of any entity.

Bajaj Finance Fixed Deposits have a FAAA/Stable rating from CRISIL, which indicates the highest safety and lowest investment risk. Bajaj Finance FDs also have a rating of MAAA (stable) from ICRA, which is another reason to invest in them.

In addition to high safety and credibility, you can also get these benefits with Bajaj Finance Fixed Deposits:

Higher interest rates – Bajaj Finance has one of the highest interest rates in the market, which makes it one of the most preferred financier by investors. Senior citizens get an additional benefit of higher interest rates over and above the regular interest rates, so they can safeguard their life’s savings and gain from stable returns.

Minimum deposit of Rs. 25,000 – With Bajaj Finance Fixed Deposits, you can start investing with just Rs. 25,000, so you can start investing any time, without having to wait and accumulate a larger corpus. Even with a smaller minimum deposit amount, you can earn better returns by laddering your investments.

Assured Returns – You can get assured gains on your investments, because there is no effect of market fluctuations on your investments. You can also determine your returns in advance, by using a Fixed Deposit Calculator that enables you to plan your investments easily.

Easy online application process – You can save time and trouble with easy online access to your FD account, which helps you track your investments easily.

Get the perfect blend of credibility and attractive returns by investing in Bajaj Finance Fixed Deposits, which help you, maximize your profits with hassle-free investments.

Before investing in a debt instrument, you must determine the amount of risk involved. Being cognizant of these risks enables you to take smarter investment decisions, by avoiding losses, and ensuring that you earn higher returns on your investment.

Credit rating agencies can help you get the right information and guidance about the best financiers for investments, before you start investing. ICRA, formerly known as the Investment Information and Credit Rating Agency of India Limited, is one such credit rating agency.

Established in 1991 by leading financiers, ICRA is an independent and professional investment information and Credit Rating Agency.

ICRAs’ credit ratings help in forming an opinion on the risk types that affect the relative ability of financiers to service their interest payment obligations and principal repayments. With ICRA’s ratings, issuers can enhance the marketability of the instrument, and help depositors and borrowers make an unbiased opinion on the relative safety of the sum on a debt instrument.

ICRA’s credit ratings can be beneficial in several ways. They are designed to:

1. Guide and educate institutional and individual investors or creditors

2. Enable borrowers and issuers to tap more resources from a wider range of the investing public, by accessing the financial and capital market

3. Promote transparency in financial markets

4. Make fund-raising processes easy for intermediaries

With an unbiased and clear opinion about debt instruments, issuers can enhance the marketability of their instruments, thereby alleviating their financial standing in the market.

The asset quality reflects the financier’s ability to manage their asset portfolio, and the credit quality of their clients. ICRA’s ratings enable depositors to take the right investment decisions, by acting as an assurance to indicate the highest degree of safety for a fund.

These ratings are awarded on the basis of several factors, which include the information available, analysis made, and interactions with the Management.

Here’s a look at ICRA’s rating system for Fixed Deposit ratings:

ICRA’s credit ratings are a measure of safety, using which you can get an assurance on whether the obligations will be repaid on time. You can also form an informed opinion on the probability of default on the instruments.

Fixed deposits are generally, safe investment instruments that enable you to gain stable returns over a fixed period of time. Often, the lure of higher returns makes us choose financiers, offering higher interest rates. However, this can pose an additional risk, where depositors may also lose the money they invest.

However, with an unbiased credit rating by ICRA, you can determine the safety of your funds, and look for the right financier. You can also compare the ratings, and choose the best financier offering higher interest rates, while also possessing higher safety ratings by ICRA.

Bajaj Finance Fixed Deposits have MAAA (stable) rating from ICRA, which indicates the highest safety and lowest investment risk. Bajaj Finance FDs also have a rating of FAAA/Stable from CRISIL, which is another reason to invest in them.

With one of the highest safety ratings by CRISIL and ICRA, Bajaj Finance also offers several benefits to depositors. Some of these benefits include:

1. Higher interest rates – Bajaj Finance is offering one of the highest interest rates in the market, which makes it a preferred financier. In addition to the high interest rates offered, Bajaj Finance FDs provide 0.25% higher interest rates to senior citizens.

2. Minimum deposit amount of Rs.25,000 – You can start investing with just Rs.25,000, with Bajaj Finance Fixed Deposits.

3. Flexible tenure – You can easily choose your tenure, when investing in Bajaj Finance Fixed Deposits

4. Periodic payout options –When investing in Bajaj Finance FDs, you not only get to choose the option to gain from periodic interest payouts, but also get to choose the frequency as per your convenience.

Start investing in Bajaj Finance Fixed Deposits today, and benefit from assured returns, easily online application and stable returns over a flexible tenure.

Investing in fixed deposits for a specific tenure can help you gain from fixed and steady interest rates. However, unforeseen circumstances may warrant urgent financing, which is why you may want to liquidate your savings before the end of your investment tenure.

The penalty on withdrawing your deposit prematurely from a non-banking financial company, depends on when you choose to withdraw from your deposit. As per the Reserve Bank of India, here are the guidelines on penalty for premature withdrawal of fixed deposit:

in case no rate has been specified for that period, the interest rate payable is 3% lower than the minimum interest rate at which public deposits are accepted by the non-banking financial company.

Often, breaking your FDs prematurely can adversely impact your investments.

– The returns on your deposit are pre-determined, based on your tenure. However, when you withdraw prematurely, you may end up losing interest.

– In addition to loss of interest, your bank or financial institution also charges an additional penalty for withdrawing your deposit before maturity.

– By withdrawing your deposit prematurely, you may lose out a source of emergency fund during challenging times.

Thus, instead of withdrawing prematurely, it is always advisable to take a Loan against Fixed Deposit, to cater to immediate needs without having to liquidate your savings. This can help you get the desired cash flow without losing out on the interest.

When you invest in Bajaj Finance Fixed Deposit, there is a fixed lock-in period of 3 months. While there is no penalty on withdrawing money prematurely, you may incur losses in terms of earned interest.