As markets become volatile, invest in Fixed Deposit3 min read . Updated: 13 Mar 2020, 06:18 PM IST
- Even as the market grapples with the impact of lockdowns and slowdowns, FD holders can look forward to assured returns as FDs offer interest at a fixed rate.
With the coronavirus outbreak being declared a pandemic by the World Health Organisation, about Rs. 11 lakh crore investor wealth was erased on Thursday –March 12, 2020 and Friday began with Sensex and Nifty plummeting to lower circuit limits in the early session.
Nonetheless, more recent news indicates huge recoveries with Sensex rallying by about 1,500 points, and the markets moving up 5% after a 10% slump in early trading. Amid these market volatilities, you may want to ask – What is behind the frequent bouts of volatility? Experts, while acknowledging the effect of the pandemic, point to an infodemic—rumours and fears about how COVID-19 will affect the country. Alongside the outbreak, there is uncertainty about the impact of the global slowdown on the Indian economy.
As a retail investor, focusing on the big picture is important, but adopting practical measures is equally vital to ensure financial safety. One area you can pay attention to, during this volatile period, is asset allocation. To this end, steer clear of risks by investing in a fixed deposit as it offers yields independent of the market.
Here’s why you should consider investing in a fixed deposit, during times of these uncertainties.
Get assured yields at a competitive interest rate
Even as the market grapples with the impact of lockdowns and slowdowns, FD holders can look forward to assured returns as FDs offer interest at a fixed rate. Options like the Bajaj Finance Fixed Deposit are noteworthy, as you earn at a rate of up to 8.05%, when the investment tenor is at least 48 months.
New customers earn interest of up to 7.80%
Existing customers earn interest of up to 7.90%
Senior citizens earn interest of up to 8.05%
Consider this table to know how an amount of Rs. 20,00,000 invested for 5 years grows for different investors.
* These figures were generated with the FD calculator.
From the above tables, you can see how an amount of Rs. 20,00,000 grows to 29,11,547 for new customers; Rs. 29,25,076 for existing customers and Rs. 29,45,465 for senior citizens. Thus, you can grow your savings by more than 40%, regardless of your customer type.
With certainty of returns and guaranteed growth of your savings, investing in a Bajaj Finance Fixed Deposit now can be a great decision. You can grow your savings furthermore, by choosing to auto-renew your deposits without manual intervention or extra documentation. This also provides you with an additional interest rate benefit of 0.10%, which results in higher returns.
Enjoy a stable investment environment
Fixed deposits allow you to hedge your portfolio against risks. While your equity-linked investments are susceptible to market swings, you can stay clear of capital and interest loss with an FD. Investing in a company FD does imply some risk; however, the Bajaj Finance FD is credible, and its stability has been vouched for by renowned credit rating agencies like ICRA and CRISIL. The FD carries the ICRA MAAA and CRISIL FAAA ratings, the highest ratings in their respective categories.
Stepping out of investments entirely is not an option as recent data shows that the retail inflation rate in February 2020 was 6.58%. So, consider adding FD to your portfolio to augment your wealth amidst market volatility.
Get started with bite-sized contributions
A common way of dealing with risk is to spread investments over time and to this end, mutual funds offer Systematic Investment Plans. Bajaj Finance offers its customers a parallel mode of investing, sans the risk factor, via its Systematic Deposit Plan feature. You can use it grow your wealth without accumulating a lump sum first. Here, you make contributions of Rs.5,000 or more per month and each contribution creates a new FD, which earns interest at the rate prevalent on the date of deposit. You can opt for 6–48 deposits in total and choose a tenor of 12–60 months for them. This new way of investing can help you get the convenience of SIPs with assured returns.
Therefore, while the market experiences turbulence amid the COVID-19 outbreak and threat of a global slowdown, revisit your financial plan and tweak it for stability by investing in an FD. Locking into one now will help you gain from the currently competitive interest rates, which may go down should the RBI bring slash the repo rate next quarter. To get started, book a Bajaj Finance online FD today, from the comfort of your home.
Disclaimer: This content is distributed by Bajaj Finserv. No HT Group journalist is involved in the creation of this content.