Fixed Deposits (FDs), overall, are very famous as an investment instrument simply because they are institutionalised, provide safety and decent returns.
In India, you can make an FD with commercial banks, Non-Banking Financial Companies (NBFCs) and Post Offices. But when drawing a question between Post Office FD and Corporate FDs, the interest rates offered are of grave concern.
Post Office FD vs. Corporate (Bajaj Finance) FD
|Basis||Post Office FD||Corporate (Bajaj Finance) FD|
|Interest Rates||The interest rates fluctuate from 5.5% to 6.7% depending on different time periods but they don’t vary as per age. In simpler terms, the rate remains same for senior citizens too; unlike the policy followed by banks, etc.||Among the reputed corporate fixed deposits, the average rate of return range is from 4.5-5.75%. However, Bajaj Finance does better than the average. It provides a general rate of 6.50% subject to further increments with certain conditions.|
|Method of Opening||You can either use the mobile banking method via the Indian Post Banking Application on play store or the offline method by going to a branch; to open a Post Office Term Deposit or FD.||At Bajaj, the offline process involves downloading and printing forms from the websites or procure them at branches in order to physically submit them to an executive. Their online application prevents you the hassle of page long documents and even longer queues. It allows you to browse the best rates from the safety of your homes while completing the entire process digitally.|
|Tenor||1-5 years||1-5 years|
|NRIs and Senior Citizens||Cannot apply, no special offers for Senior Citizens||Given special facilities at Bajaj Finance FD, Senior citizens are given incremental rates|
|Loan against FD||Not available||The main concern of a depositor when it comes to an FD is, what if he/she has to break it. Therefore, at Bajaj depositors are allowed to take a loan against the FD (post the initial lock-in period of 3 months) when they need to make emergency withdrawals. The only condition is that the loan value cannot exceed 75% of the FD value.|
|Calculation||No official calculator available, the Bajaj Online FD calculator is used||The Bajaj Online FD Calculator requires you to input tenor, interest rate and amounts so as to predict cumulative interest and maturity value|
From the table above it is clear that Bajaj Finance FD is a better option. Here are some more benefits in an elaborated form to establish this fact firmly.
High Interest Rates
At Bajaj Finance, you receive a very lucrative interest rate of 6.50% which increases to 6.75% if you are a Senior Citizen (60 years of age or more). This allows you to grow your wealth at a very good rate while assuring safety of your money. In corporate fixed deposits, this is the best you’d get among the reputed companies.
Special offers to Senior Citizens
Bajaj FDs value and understand their senior citizen account holders. Thus, along with a higher interest rate they can also avail periodic pay-outs to fund general expenses that arise at their age. Thus, this does away with the myth that corporate FDs as an investment option aren’t suitable for the elderly.
Benefits to Pravasi Bhartiyas (NRIs)
For Non-Residential Indians (NRIs) and others of the same category with an NRO account, tenors between 12 and 36 months are given as a choice. The interest rates are the same for them including the additional benefits given to Senior Citizens.
Systematic Plan for Depositors
The Systematic Deposit Plans (SDPs) launched by Bajaj allow people to make deposits on regular intervals, keeping in mind the erratic availability of funds. In this, the tenor still remains between 12 and 60 months. Depositors have to choose between 6 to 48, for the number of deposits they’d make in a month under their SDPs at Bajaj FD. When it comes to the maturity, they have an option to choose a single date or a monthly maturity scheme.
High Credibility and Stability
Bajaj Finance is a safe option because it has been accredited with the highest ratings of CRISIL’s FAAA and ICRA’s MAAA, ensuring your money and funds are safe.
Smaller Minimum Deposit
With a cap of only Rs 25,000 you can start investing in FDs, at an early stage without being forced to accumulate a larger set of funds.
While having automatic and unconsented renewals is scary, Bajaj gives you the option to opt for an auto-renewal to save you the time and effort of manually filling the renewal forms repeatedly.
Therefore, an accurate comparison suggests that Bajaj Finance FD is a better option but Post Office FDs are worth the investment, too.