Is it Advisable to Invest in Fixed Deposit for a Span of 1 year

Many people tend to invest in FDs for a long period of time. If you are planning to hold your FD for a long tenor, it may not be the best idea. This is mainly because the interest rates could go higher in the next few years. So, if you have your capital locked in an FD for a long period of time, there is a high chance that you might miss out on the increasing FD interest rates. If you invest in a 5-year FD, then, you may miss out on the increased interest rates for that particular period of 5 years. Many people might consider breaking their FD and reinvesting in order to increase their returns with higher interest rates. However, in this case, banks typically tend to cut 1% for breaking the Bajaj Finance FD.

Why Can Interest Rates Grow Higher?

The interest rates offered by banks depend on how the RBI holds the rate. In some cases, if the RBI cuts the interest rates, the lending rates offered by banks tend to decrease. The RBI has been on a mission to tame inflation in the country. If the inflation is increasing, the central bank typically tends to increase the rate of interest at which it lends money to banks.

Bajaj Finance FD Rates

The interest rates provided for senior citizens are higher than that of the rate provided for non-senior citizens. Here is a list of the Bajaj Finance FD rates 2021 for both senior citizens and non-senior citizens.

Tenor (In Months) Senior Citizens Non-Senior Citizens
12-23 5.75% – 5.90% 5.51% – 5.65%
24-35 6.17% – 6.35% 5.94% – 6.10%
36-60 6.55% – 6.75% 6.31% – 6.50%

Final Thoughts

It is recommended to keep your Bajaj Finance FD investments to a comparably shorter tenor as it allows you to reinvest and experience the benefits of higher interest rates. You can also use the Bajaj FD calculator to calculate your returns based on the capital invested.