Overdraft Utilizing Fixed Deposit: An Explanation
Bajaj Finance, a leading non-banking financial company in India, has introduced flexible Fixed Deposit (FD) options that cater to a wide range of investor needs. These FDs stand out for their high returns, customisable tenure and payout options, top safety ratings, and convenience through digital processes.
The key features of Bajaj Finance's flexible FD options include competitive interest rates, flexible tenure options, and flexible interest payout options. Senior citizens can enjoy interest rates up to 7.30% per annum, while other investors can benefit from slightly lower but still attractive rates. Deposit durations range from as short as 7 days to as long as 10 years, with common options between 12 to 60 months, aligning with individual financial goals.
Investors have the choice to receive interest in various modes—cumulative (paid at maturity) for long-term savings or non-cumulative with monthly, quarterly, half-yearly, or annual payouts, catering to needs for regular income or reinvestment flexibility.
Bajaj Finance FDs carry top-tier ratings ('AAA' from CRISIL and ICRA), offering high security and assurance of principal safety. The entire FD booking and management process is seamless, 100% digital, and paperless, facilitating easy investment without branch visits—ideal for busy individuals and senior citizens.
Investors can also avail loans against their fixed deposits, providing liquidity without breaking the FD prematurely. Additionally, senior citizens benefit from enhanced interest rates and convenient digital management options, making it a preferred choice for retirees seeking stability and returns.
The minimum deposit amount is ₹15,000, making it accessible to a broad customer base. Bajaj Finance's flexible FD options meet diverse investor needs, including senior citizens, women, and those seeking hassle-free, secure investments.
It is important to note that the liquidity features offered by Bajaj Finance on their flexible FD options may have specific conditions and requirements. For instance, an overdraft against an FD can be a potential fallback option for quick liquidity, but it comes with associated costs and liabilities. When using an overdraft facility, there is a lien on the FD, and the interest costs and lien on the FD are caveats associated with this facility.
In contrast, the overdraft facility against an FD does not affect the earning of interest on the FD. Banks offer a credit facility called an overdraft against a fixed deposit, allowing borrowing up to 75-90% of the FD's value. The interest is paid only on the amount withdrawn, while the FD continues to earn interest.
However, Bajaj Finance does not offer an overdraft facility against a fixed deposit. Instead, they provide a loan against FD facility, which is a different product with its own terms and conditions.
In conclusion, Bajaj Finance's flexible FD options offer a range of benefits, making them an attractive choice for investors seeking high returns, customisable tenure and payout options, top safety ratings, and convenience through digital processes. However, it is essential to understand the associated costs and terms, particularly when considering liquidity features such as the overdraft facility.
[1] Bajaj Finance Limited. (2021). Fixed Deposits. Retrieved from https://www.bajajfinserv.in/products/fixed-deposits [2] Bajaj Finance Limited. (2021). Senior Citizens Fixed Deposits. Retrieved from https://www.bajajfinserv.in/products/fixed-deposits/senior-citizens-fixed-deposits [3] Bajaj Finance Limited. (2021). Fixed Deposit Calculator. Retrieved from https://www.bajajfinserv.in/products/fixed-deposits/fixed-deposit-calculator [4] Bajaj Finance Limited. (2021). Loan Against FD. Retrieved from https://www.bajajfinserv.in/products/loan-against-fixed-deposit
- Businesses and individuals looking for secure investment opportunities with customizable terms may find Bajaj Finance's Fixed Deposits an attractive option, as they offer high returns, flexible tenure, and payout options, and are backed by top-tier ratings for safety.
- Within the finance sector, Bajaj Finance's Fixed Deposit products cater to a diverse range of investors, such as senior citizens, women, and those seeking hassle-free, secure investments, with a minimum deposit amount of ₹15,000 and digital processes for easy investment management.
