Fixed deposits (FDs) are popular among Indian investors due to their low-risk nature and assured returns. Bajaj Finance, a leading Non-Banking Financial Company (NBFC), offers competitive FD interest rates. These interest rates vary depending on the tenure and the customer profile (senior citizens and non-senior citizens). Understanding the current FD interest rates offered by Bajaj Finance can help you plan your savings effectively.

FD Interest Rates Offered by Bajaj Finance

Bajaj Finance offers interest rates according to various tenures, typically from 12 to 60 months. As of 2024, the available rates are as follows:

Below are the regular interest rates offered by Bajaj Finance for both regular and senior citizens:

Though these rates may fluctuate with market conditions, FDs offer stable and predictable returns, making them one of the most dependable savings options for investors.

How to Calculate FD Interest Using the Formula

It's important to estimate the interest you may earn on your FD. Bajaj Finance FDs use the compound interest method, with interest compounded quarterly.

The formula for compound interest is:

A = P (1 + r/n)nt

Where:

• A being the final amount 
• P being the principal amount 
• r being the annual interest rate 
• n being the number of times interest is compounded per year 
• t being the tenure of the FD in years

For example, if you invest ₹5 Lakhs in a Bajaj Finance FD for 3 years at an interest rate of 8.10% p.a., the interest compounded quarterly will be:

A = 5,00,000 (1 + 0.081/4)4*3

Once the calculation is complete, the maturity amount would be approximately ₹6.34 Lakhs, with interest earned around ₹1.34 Lakhs. This example illustrates how compound interest helps increase returns over time.

Premature Withdrawal Penalty

Bajaj Finance allows premature withdrawal of FDs, but this comes with a penalty. If you withdraw the FD before it matures, you may receive a lower interest rate than originally offered. It is important to keep this in mind before making any withdrawal decisions. To avoid such losses, it is advisable to choose the FD tenure carefully based on your financial goals.

Taxation on FD Interest

The interest earned on Bajaj Finance FDs is taxable under the Income Tax Act, 1961. If your total interest exceeds ₹40,000 in a financial year (₹50,000 for senior citizens), it becomes subject to Tax Deducted at Source (TDS). A 10% TDS applies if your PAN is submitted to the NBFC, but without a PAN, the rate rises to 20%.

To prevent TDS if your income falls below the taxable limit, you can file Form 15G (or Form 15H for senior citizens). Always consider your total taxable income while planning FD investments.

Benefits of Choosing Bajaj Finance FDs

Bajaj Finance FDs come with many advantages for investors. Here are some of the key benefits:

Attractive Interest Rates

Bajaj Finance provides competitive interest rates, with longer tenures offering up to 8.10% p.a. for non-senior citizens.

Higher Rates for Senior Citizens

Senior citizens receive an additional 0.25% interest on all tenures, boosting their retirement savings.

Flexible Tenure Options

Investors can choose tenures ranging from 12 to 60 months, depending on their financial goals.

Periodic Payouts

You can choose to receive interest payouts on a monthly, quarterly, half-yearly, or annual basis, providing a steady flow of income.

Loan Against FD

You can borrow up to 75% of your FD's value, avoiding the need to prematurely break your investment.

Online Management

The FD can be easily applied for and managed online, offering added convenience.

Auto-Renewal

The auto-renewal option ensures your FD continues without any interruptions.

Conclusion

Bajaj Finance FDs offer competitive rates for both short- and long-term savings. Choosing the right tenure, knowing the interest rates, and calculating returns correctly can help you plan effectively. Remember, FD interest is taxable, so include that in your decisions. Also, keep an eye on rate changes due to economic factors. If you are looking for a low-risk option, Bajaj Finance FDs could be a good fit.