The decision of the finance ministry to not change the interest rate of Small Savings Schemes this quarter i.e. till December 2020 has diverted the attention of investors to Post Office Fixed Deposits that also fall under the Small Savings Schemes.
On the other hand, the reduction of bank FD rates has forced them to consider options that offer a higher rate. The company fixed deposit scheme offered by Bajaj Finance FD comes with an interest rate of up to 6.85% which is one of the highest FD interest rates in 2020.
Therefore, it is important for you to compare the features of Post Office Fixed Deposits and Bajaj Finance FD. For a detailed comparison of these fixed deposit plans, please check the below points:
FD rates comparison should be done before investing in any FD plan as it determines your returns. The Post Office FD plan of 5 years offers an interest rate of 6.6%. This is certainly more than the bank FD rates that fall below or slightly over 5% even for the 5-year FD plans.
However, Bajaj Finance FD offers an interest rate of up to 6.85% for a tenor ranging from 3 to 5 years. Therefore, it will provide much better returns at maturity as compared to the Post Office and bank FDs.
Easy investment process
For investing in a Post Office FD, you will have to visit a nearby Post Office branch as the online account opening process is not provided. However, investing in a Bajaj Finance FD is much easier due to a complete end-to-end online process.
Everything from filling an online FD form to verifying KYC can be done online via this paperless procedure. You get a 0.10% additional interest rate for using the online process and you can even make the payment by using your debit card from certain locations.
Bajaj Finance FD provides more flexibility when it comes to premature withdrawals than Post Office FD plans. For withdrawing a Bajaj Finance FD before completion of the FD tenor, you will have to pay a minimum penalty which will be deducted from your interest earnings.
On the other hand, you can withdraw a Post Office Deposit only after completion of 6 months from the date of deposit. If you withdraw the deposit before the completion of 6 months then the interest will be calculated as per the ongoing interest rate that applies to a savings account.
Bajaj Finance also offers a loan against your FD that enables you to avoid breaking your FD prematurely. This loan can be used to cover your financial emergencies and does not require the submission of any collateral as well.
Bajaj Finance FD comes with a wide range of user-friendly features that provide convenience at different stages of investment. For instance, it provides an FD calculator on its portal that lets you pick an FD plan based on your financial needs and obligations easily.
You will also find a Post Office Fixed Deposit calculator on the internet but it is not as easy-to-use as the FD calculator from Bajaj Finance. Moreover, you can even track your investment online by using Experia- your online fixed deposit account (a portal from Bajaj Finance).
The multi-deposit facility from Bajaj Finance allows you to invest in multiple FD plans simultaneously with one cheque. The tenor for each deposit can be set between 12 to 60 months as per your requirements and you can also invest in different FD types at the same time.
Also, you can click on the auto-renewal option provided on the FD form to renew your deposit automatically on the completion of the FD tenor. No such facilities and options are available when you invest in a Post Office FD. This makes Bajaj Finance FD a much more flexible and convenient option for you.
Bajaj Finance FD guarantees the safety of your deposited amount as it has received high ratings from credit rating organizations such as CRISIL and ICRA.