It is a fact that most of the people do not save enough money till retirement. This is usually due to the uncertainty of returns from the investment and lack of financial planning in terms of spending and saving money. If you curtail your monthly expenditure and invest the money in a secure investment instrument like a fixed deposit, you can save a lot more for your post-retirement plans and continue to earn fixed income after retirement.
How can fixed deposits help you secure your retirement?
The interest rate of a fixed deposit remains the same throughout the tenor irrespective of changing market conditions. This means that you can earn as per the interest rate offered by the bank at the time of opening your FD account, even if the interest rates on FDs decline afterward. This way, you can plan for your retirement without having to worry about the safety of your investment.
Here are some ways in which you can maximise your returns from fixed deposit investments:
- High returns
A fixed deposit ensures that you get fixed and high returns on your savings. With a high-interest rate, you not only accelerate your savings but also minimize the effects of inflation.
- Building a large corpus
You can book an FD for a period of 3 to 5 years and instead of opting for regular interest payouts you can choose cumulative FDs that provide the accumulated interest over the FD tenor only at maturity. Moreover, instead of withdrawing the returns after maturity you can re-invest the matured amount by renewing the FD. Thus, you do not spend your interest earnings, which helps you to build a large corpus.
If you start saving for your retirement from an early age, then you will have more chances of building a sizeable corpus. Bajaj Finance provides an extra 0.10% interest rate on renewing the FD. This means that if you book an FD at 8.35% for 5 years, then you will get an interest rate of 8.45% if you renew your FD.
- Laddering of investments
Instead of investing a large amount in a single FD, you can divide the amount in multiple FDs of different tenors and interest rates. This is called laddering of investments, which minimizes the risk of re-investing your investment at a lower interest rate.
It ensures that all FDs do not mature at once, which means that your liquidity issues get resolved, and you need to break only one of the FD instead of disturbing your entire savings during an urgent financial requirement.
Why are Bajaj Finance FDs ideal for parking your EPF savings?
The finance ministry has updated the EPF interest rate to 8.65% for the year 2018-19 which is 10 points higher than 2017-18. Therefore, people who have invested in the EPF are expected to get higher returns in this year. Also, if the investors wish to continue high-interest earnings on their accumulated PF amount or are looking for safe investment instruments after maturity then they can invest in a fixed deposit.
Bajaj Finance fixed deposits are highly rated for their safety and stability by credit rating organizations like ICRA and CRISIL. Also, the high-interest rates of up to 8.70% for senior citizens and up to 8.35% for non-seniors make Bajaj Finance FD a perfect instrument to park your EPF savings. Over 2.5 lakh individuals have booked an FD with Bajaj Finance and their total deposit book amounts to more than 16 thousand crores. This shows that it has proven to be a reliable investment instrument over the years.
Once you build a large corpus till your retirement, you can continue to earn from your savings by investing in a senior citizen FD from Bajaj Finance. These are the features of Bajaj Finance FDs that a senior citizen can benefit from:
- Loans against FDs for emergencies – Instead of breaking an FD at the time of financial emergency, senior citizens can avail a loan against Bajaj Finance FD.
- Flexible tenor – Senior citizens can choose flexible tenor options ranging from 12 to 60 months as per their convenience. Periodic interest payouts enable the senior citizens to use their FDs as a regular income source.
- Online account management – Senior citizens can manage their fixed deposit account by using the online portal of Bajaj Finance. This proves to be convenient for them as they no longer have to visit the branch office for checking the maturity date or for monitoring the details. The provision of an online FD calculator enables you to predict your returns accurately.
Bajaj Finance FDs are ideal for starting your investments at an early age as you can book an FD starting from just Rs. 25,000. Therefore, you can spend less and invest your money in Bajaj Finance FD schemes to secure your future after retirement.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory