Fixed Deposit vs Post Office Deposit Scheme: Which is Better to Invest
Fixed deposits are still one of the most popular investment instruments available in the market owing to its apparent benefits. Individuals can invest in fixed deposits provided by post offices and other financial institutions.
Post Office Fixed deposit
Similar to any other FD, Post office fixed deposits offer assured returns to its investors at attractive interest rates. The current post office FD interest rate ranges from 6.9% to 7.7%. Individuals can go to any post office near them to invest in a fixed deposit.
Bajaj Finance FD
One of the leading NBFCs of the country, Bajaj Finance also provides FDs. They offer guaranteed returns along with attractive interest rates of up to 8.10%. Interest rates as high as 8.35% is offered to senior citizens. Interested individuals can contact any company representative or visit the nearest branch to invest in a fixed deposit.
Both of these financial institutions offer fixed deposits with assured returns. Thus, here is an in-depth evaluation of both the plans to help you make an informed decision.
Loan against fixed deposit
Bajaj Finance will provide you the option of availing a loan against your fixed deposit instead of liquidating your investment. An advantage of this loan is that, it will get approved instantly. You can avail a loan of up to Rs.4 lakh against their fixed deposit.
On the other hand, Post offices don’t offer any such loans against fixed deposit investments made under them.
Monthly investment plan
Post offices don’t allow their customers to pay for the FD in monthly instalments in case they don’t have the required funds to deposit at once.
But NBFCs like Bajaj Finance allow their customers to pay for their fixed deposits through Systematic Deposit Plan (SDP). Individuals who can’t pay for the entire fixed deposit at once can opt for this small monthly payment option. Investors can choose between 6 to 48 deposits with the SDP to cumulatively invest their desired amount.
Online application and account management
In the case of NBFCs, individuals can apply for fixed deposits through an online application process. This facility will save time and reduce the trouble of standing in a queue to submit application forms.
Post offices don’t offer any such facility. Here, one has to visit the nearest post office to collect the application form, fill it up and then submit it.
Automatic renewal
Bajaj Finance also allows you to opt for an automatic renewal facility; here you don’t have to worry about renewing your Fixed Deposit. The company will renew it automatically after the tenor. This facility saves customers from the hassle of doing this renewal manually.
Post offices, on the other hand, have no such benefit on offer. Here, an investor has to visit the nearest post office and execute this renewal process manually.
These are some of the major differences between an FD offered by NBFCs like Bajaj Finance and post offices.
Post office FD interest rates are lower when compared to Bajaj Finance FDs. However, apart from being a reliable investment tool, fixed deposits can be a useful source of income. Investors should consider both the options and then make a decision according to their convenience.
Author Bio:
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story