Home / Finance / Why Investors shouldn’t waste a Moment Before Locking in their FD

Summary: Have you been considering putting away your savings in a fixed deposit? With interest cuts around the corner, now may be the best time to sign up for fixed deposit schemes while you can still avail a good interest rate.


Fixed Deposits have been one of the most trustworthy forms of investments for generations in our country. Indians have utmost trust in FD as a secure investment option because it is not subject to market risks and a one-time investment ensures that your money is in safe hands.

However, both public and private banks have announced interest rate cuts on one-year fixed deposits. Starting October, account holders will no longer enjoy interest rates as high as 7.5%. Small investors that endow their savings in schemes that offer a very low chance of risk and steady interest rates will see a drop in interest rates of all such schemes. Post office investments, fixed deposits, PPF along with all other small schemes are likely to take a hit in interest rates.

What’s on the horizon?

A lot of people who invest in such schemes are usually people that are not investing their money in mutual funds or any other high-risk investments. They are usually counting on the interest accumulated over a period of time as an additional income. This decision on the part of both public and private banks will affect investors who are in need of this additional income. Finance Minister Arun Jaitley has indicated towards the likelihood of this happening. Banks have also announced heavy cuts in their base rates, which indicates that term-rates on their long-term deposits are to take a hit along with other popular banks.

What can you do?

In order to avoid the inevitable and investing your savings at a bad time, it is important to make the right decision at the right time. Investing a lump sum amount at a higher interest rate at the very outset for a lock-in period of 3 to 5 years will ensure that you reap the benefits of a good interest amount for a fair duration. The longer you invest it for, the lesser this news affects you or has an impact on your savings. Not only are the interest rates predicted to fall soon, but they are also very likely to be on a decline. This steady fall in interest rates will however not affect the investments made over a period of the next month or so.

Act now!

This leaves a large chunk of the Indian middle-class with only two options: one is to invest in fixed deposit in a very small window very soon to enjoy higher interest rates than what they are going to be cut down to very soon or invest in a company or corporate FD offered by financial institutions like an NBFC that is likely to offer good interest rates on FD for the long run. It is advisable to take this decision before it is too late and you are forced to lock-in your income at a negligible interest.

Bajaj Finance’s Fixed Deposit schemes, starting at as little as Rs. 25,000 a month, offer up to 8.30% returns, one of the highest in the market today. You can create an FD account with Bajaj Finance in more than 200 cities in India and all you have to do is sign up for a simple form online. Senior citizens can also avail of a higher interest rate.