As a parent, you want to provide your children with the best, and adequate finances play a crucial role in ensuring this. Therefore, having funds in a savings account doesn’t pass muster as it offers minimal returns that are outdone by the rate of inflation. You need to shift your sights to an investment option that is secure and offers steady monetary growth such as a fixed deposit.
To understand how a fixed deposit for a child is a perfect fit when it comes to securing your children’s future, take a look at its features.
Guaranteed monetary security
Monetary security is one of the most essential requirements when investing for your children’s future, and fixed deposit checks this box. It is a low-risk option as it isn’t linked to the market, and when you pick one with a high credit rating you can be sure that your money is in safe hands.
The reason why a savings account isn’t ideal is that it doesn’t offer adequate interest. A fixed deposit remedies this by giving you substantial returns that result in consistent growth of your wealth. As FD rates change on the basis of several factors such as the RBI’s policies, it is important to time your investment correctly to lock in on a high-interest rate.
In addition, it is best to invest in short-term fixed deposits to get returns that beat inflation. When you pick a Bajaj Finance Fixed Deposit you can choose a tenor of your choice and enjoy a high-interest rate too. With a minimum investment amount of Rs.25,000, it offers 8.75% interest on a 36-month FD with interest payable on maturity and up to 9.10% if you’re a senior citizen.
Flexible payout options
Fixed deposits allow you to receive the principal and interest on maturity, or collect payouts through the tenor, at a frequency of your choice. This means that if you need finance on a monthly basis to pay for your child’s extracurricular classes, for example, you can opt for an FD with monthly payouts and use this to pay the fees. However, for maximum returns, it’s best to pick an FD with interest payable at maturity as this FD variant benefits from compounding interest.
Emergency financial assistance
While you can prematurely withdraw from your FD, you will face a loss of interest and a penalty in some cases. Instead, during an emergency simply avail a loan against your FD. For instance, if your child has been in an accident and you need a lump sum amount urgently, you can use this option and pledge your investment as collateral. With a Bajaj Finserv Loan Against Fixed Deposit, you can get up to 75% of your FD’s value as a loan. Moreover, you can foreclose it or make prepayments at no extra charge.
These reasons illustrate why a fixed deposit is a must-have vehicle in your portfolio when you plan your children’s future. Moreover, an FD from Bajaj Finance is your best bet because of the high FD rates and flexibility it offers. Get started by using the FD Interest Calculator to forecast your returns and make an investment by applying online right away.