Post Office FD vs. Bajaj Finance FD: Interest Rates & Benefits

December 15, 2020 jack 0 Comments

Among the various small savings schemes offered by Post Office, Post Office FD i.e. time deposit is a popular investment scheme. It is a risk-free investment option because it is backed by the government. Bajaj Finance FD is a corporate FD that offers one of the highest FD rates in our country. It is also considered to be safe as it has received high ratings by credit rating agencies like ICRA and CRISIL for ensuring the safety of the depositor's money.


Let's compare both these investment instruments based on their features and benefits to analyze the better option between them:

Rate of Interest

In Post Office FDs, the interest rate varies as per the tenor chosen by you. For example, the 1-year FD will grow at an interest rate of 5.5% whereas the 5-year FD will grow at 6.7%.

On the other hand, Bajaj Finance offers interest rates up to 6.85%. Senior citizens get an additional FD rate of 0.25% and non-seniors are eligible for 0.10% extra FD rate on filling the online FD form for opening an FD account.

Deposit amount & tenor

The minimum amount for opening a Post Office FD account is Rs. 1000 and you can invest further in multiples of 100. You can deposit as much as you want as there is no maximum limit for the deposit. Also, you can lock-in your deposits for 1, 2, 3, and 5 years.

With Bajaj Finance FD, you can start investing with only Rs. 25000 and a flexible tenor ranging from 12 to 60 months can be selected as per your convenience.

In case you don't want to deposit your entire corpus in one FD, you can split it into multiple FDs of varying FD types and tenors. Also, with the multi-deposit facility, a single cheque can be submitted to deposit in multiple FDs simultaneously. You can easily ladder your deposits, balance the effect of fluctuating interest rates, and get multiple liquidity points by using this feature of Bajaj Finance FD.

Interest payouts

Post Office FDs pay interest annually whereas Bajaj Finance FD will allow you to choose between monthly, quarterly, six-monthly, and yearly interest payouts as per your financial needs. Therefore, it is more flexible in terms of interest payouts.

Also, you can choose to receive the accumulated interest directly at maturity by investing in a cumulative FD. As the interest is not paid periodically, it gets added to your principal in the next interest calculation cycle and this compounds your returns considerably.

Though Post Office FDs seem to be lucrative, you can see that the Bajaj Finance FD rates are much higher. It also provides flexibility in terms of tenor and investment methods. The FD calculator provided on its portal can be used to predict your returns accurately and you also get a loan against FD to cover a sudden financial crisis.

The option of online investment procedure and online tracking of investment provides the much-needed convenience for those who cannot step out to invest or monitor their investments. You can even choose the option of FD auto-renewal while filling the application form to avoid any hassles afterward. All these features and benefits make it one of the better investment options in India today.

Both Post Office FD and Bajaj Finance FD are safe and offer attractive fixed deposit interest rates. However, Bajaj Finance FD scores higher when it comes to interest rates, ease of investment procedure, and flexibility of tenor. It also enables you to pick the interest payout frequency as per your financial needs. A higher interest rate is offered to senior citizens and non-seniors can avail the benefit of the extra FD rate by choosing the online investment procedure.

The multi-deposit facility that allows you to invest in multiple FD plans at once sets it apart from all the other FD plans. A collateral-free loan can be opted for instead of breaking your deposits in times of financial crisis and its FD calculator permits you to check the returns before investing.

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