For decades, fixed deposits have been immensely popular among Indian investors, irrespective of their age and risk profile. This is because the returns on FDs are not linked to the stock markets. This results in assured returns as promised by the issuer at the time of starting the investment. However, the return and the safety of the investment depend on the rate of interest and credibility that an issuer offers.

To benefit from competitive interest rates and enjoy high safety and stability of your investment, open a fixed deposit with a credible issuer such as Bajaj Finance. Here, you can earn interest up to 8.70 per cent depending on your customer profile and chosen investment tenor. Besides, Bajaj Finance's fixed deposit has a high stability rating of "FAAA" by CRISIL and "MAAA" by ICRA, both of which indicate that your investment is absolutely safe. Furthermore, the high credit ratings also mean that you will receive your returns on time.

However, it's important to note that FD interest rates depend on the prevailing repo rate. In fact, there is a direct relationship between the two. Ideally, a hike in repo rate means a rise in the FD rates and vice versa. Currently, after four rate cuts this year, the repo rate stands at 5.40 per cent. In such a scenario, you may wonder if now is the right time to invest in an FD. The answer is that you certainly must. Here's why.

RBI has maintained an "accommodative" stance

Besides bringing down the repo rate by 35 bps, the RBI has also changed its monetary stance to "accommodative" from "neutral" in order to induce economic recovery and aid in its growth. This means that the chances of future rate cuts are lower. However, there is still scope for a cut of 50-100 bps owing to inflation.

Given the volatility, now is the right time to park your funds in a fixed deposit. Besides keeping your money safe and away from fluctuations, your investment will also continue to earn the best interest rates that you lock in now. In contrast, if the repo rate further dips, you will have to accept lower returns as per the FD rates that are prevalent then.

Thus, investing in an FD right away is prudent rather than waiting for an increase in rates, which may or may not take place. Take a look at what your earnings will amount to when you invest in a Bajaj Finance FD. As Bajaj Finance offers different interest rates depending on your investor profile, the following tables outline your earnings when you invest Rs 10 lakh for five years as a new investor, an existing customer or a senior citizen investor.

New customer

Amount (in Rs.) Tenor (in years) Interest rate (in %) Interest (in Rs.) Maturity amount (in Rs.) 10,00,000 5 8.35 4,93,291 14,93,291

Existing customer

Amount (in Rs.) Tenor (in years) Interest rate (in %) Interest (in Rs.) Maturity amount (in Rs.) 10,00,000 5 8.45 5,00,195 15,00,195

Senior citizen

Amount (in Rs.) Tenor (in years) Interest rate (in %) Interest (in Rs.) Maturity amount (in Rs.) 10,00,000 5 8.7 5,17,566 15,17,566

Small saving schemes are offering a lower interest rate

The Centre reviews the interest rates on small saving schemes periodically, which means that they are subject to change every quarter. These rates are aligned to the interest on government bonds having similar maturities. Following the downward trend of the interest on 10-year government bonds, there has been a drop in the interest rates applicable on small savings instruments as well.

For instance, the rate of interest on Public Provident Fund (PPF) has been reduced to 7.9 per cent from 8 per cent and the interest rate for the five-year National Savings Certificate (NSC) now stands at 7.9 per cent. Besides, it is likely the interest rates on small saving schemes are further going to fall by 10-20 bps in the coming quarter. Since the interest rate regime doesn't seem to be getting better, your best move is to start investing in an FD right away.

FDs offer value-added features in addition to guaranteed returns

Besides offering you an attractive interest rate, an FD also has other features that are beneficial for you as an investor. For instance, to make investment convenient, Bajaj Finance offers a multi-deposit facility that allows you to invest in up to five FDs using just a single cheque. Moreover, you can select different amounts, tenors and payout frequencies for each unique FD. What's more, in an emergency, you can make a premature withdrawal from a single FD instead of liquidating all your investments. This means that you can access liquidity while still enjoying the benefits of investing over a long tenor.

Apart from this, the issuer also allows you to choose the auto-renewal facility at the time of investing. Through this facility, you give the issuer a standing instruction to automatically renew your FD on maturity. This way, you don't have to undergo the hassle of submitting additional paperwork to reinvest your proceeds. Also, when you reinvest your FD, you earn an additional interest of 0.10 per cent.

Keeping these reasons in mind, invest your hard-earned money in an FD now and secure your finances for the future. Once you evaluate your needs and goals, simply use the FD calculator to plan your investment thoroughly. Make the most of the facilities that Bajaj Finance has to offer by utilising the FDs that have a tenor ranging from 12 to 60 months.

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