While you may keep a portion of your savings liquid as an emergency corpus, a good financial practice is to steer a chunk towards wealth generation. To this end, a savings account is not sufficient as its returns will not keep you afloat, especially when inflation rates rise. A fixed deposit is a better alternative, in such times. 
FD promises assured returns, at better rate of interest, and all you need to do to earn profitably, is to part with your finances for the length of the tenor. That said, and though FD is a plain and simple instrument, you can enhance your returns by employing the right tactics.

To know how to earn more on your FD investments, read on. 

Invest in a company fixed deposit
Company FDs are known to offer better returns than bank FDs. However, the trade-off here is risk. Bank FDs are known to be the safer of the lot. However, you can look up credit ratings to ascertain how stable the instrument you are considering is. For instance, the Bajaj Finance Fixed Deposit carries ratings of FAAA by CRISIL and MAAA by ICRA. These being the highest attainable in their respective categories, point towards a default-free experience.

With the announcement of Long-Term Repo Operations and the possibility of some moderation of small saving scheme interest rates in the next quarter, getting high rates on bank FD can be tough. It is hence, better to invest in a company fixed deposit instead. 

Select an issuer that offers generous returns
Once you choose the safest FD issuers to invest with, focus on the stable ones that offer attractive returns. For instance, Bajaj Finance offers FD interest rates of up to 8.05%, and this translates to growth of wealth by over 45%, if you choose to invest for 5 years.

At present there are over 2.22 lakh customers growing their wealth with Bajaj Finance, contributing towards a deposit book of ~Rs. 20,607 crore.

The table below illustrates how you too can enhance your savings here.
Deposit amount: Rs.20 lakh
Tenor: 60 months

Customer type

Interest rate

Total interest earned (Rs.)

Total maturity earned (Rs.)

New

7.80%

9,11,547

29,11,547

Senior citizen

8.05%

9,45,465

29,45,465

Existing

7.90%

9,25,076

29,25,076

 

If you look at the above table and compare your total maturity amount with the initial deposit, you will observe a growth of 45% or more, on your savings. 

Opt for payouts at maturity only
While frequent payouts work well for those with recurring financial needs, payouts at maturity only maximise your gains. When you forgo regular interest payouts, the interest you earn is re-invested, thus maximising your compound interest gains. Also, the higher the payout frequency, the lower the effective interest rate you get.

You can use the FD calculator to pick between the two, and plan your investments better.

Considering a deposit worth Rs.30 lakh and a tenor of 48 months, below is what you can expect from the two schemes.

  • Payouts at maturity

Interest rate (%)

Maturity amount (Rs.)

Interest earned (Rs.)

7.9

40,66,371

10,66,371

 

  • Periodic payouts

Payout frequency

Interest rate (%)

Interest earned (Rs.)

Net interest earned (Rs.)

Monthly

7.63

19,075

9,15,600

Quarterly

7.68

57,600

9,21,600 

Half yearly

7.75

1,16,250

9,30,000

Annually

7.90

2,37,000

9,48,000

 


Ladder your FD investments efficiently
If you require liquidity every year or so, instead on locking into one long-tenor FD, you can stagger your investments so that your FDs mature in time for your goals. This technique is called laddering. You can easily employ it by using the multi-deposit facility offered by Bajaj Finance. Here, you can invest in FDs of varying tenors through a single cheque deposit. With this technique you avoid breaking your FD and thus, side-step penalties and reduced interest rates.

Further, if you want your FDs to mature every month, then simply start a Systematic Deposit Plan with Bajaj Finance. Through such a plan, you make monthly contributions of Rs.5,000 or more. Each one is considered as a new FD, earning interest at the rate prevalent on the date of deposit. You can have between 6 and 48 deposits and set a uniform tenor, ranging between 12 and 60 months, for them all. Once the first FD matures, you get proceeds every month.
Re-invest your returns for further gains
To further enhance your FD gains, through the power of compound interest, you should reinvest your proceeds rather than park them in a savings account, should you not need liquidity immediately. To do so, Bajaj Finance offers the Auto-renewal facility. It allows you to stay invested for a longer tenor, without manual intervention and what’s more, it lets you pick up renewal bonuses, currently a 0.10% interest rate hike, on the way.


While reinvesting your FDs returns is easy, getting started with a Bajaj Finance FD is simple too.
Existing customers can simply fill the Bajaj Finance online FD to invest from the comfort of their homes, with zero paperwork. So, when opening an FD, make use of these 5 tips to truly maximise your returns!