Fixed-income investors with an appetite for risk can consider parking a portion of their surplus in the fixed deposits of Bajaj Finance. The firm offers cumulative and non-cumulative options under its fixed deposit scheme.
The tenure ranges from 12-60 months with interest rates from 7.72% to 8.35%.
The offer is rated FAAA/Stable by Crisil and MAAA (Stable) by ICRA denoting very strong degree of safety regarding timely payment of interest and principal and lowest credit risk.
The minimum deposit is ₹25,000. The firm offers 0.10 percentage points more interest for Bajaj Group staff, Bajaj Finance customers and existing policyholders of Bajaj Allianz Life Insurance. Senior citizens get an additional 0.35 percentage points.
Investors not looking for regular income can consider the 36-month cumulative option that offers 8.35% returns.
With the RBI easing repo rates by over one percentage point so far this year, deposit interest rates have been falling over the plast few months.
Since interest rates are falling and are expected to be benign in the near-to-medium term, a three-year time frame will enable investors to lock into higher rates now. Besides, a three-year tenure is ideal to scout for better reinvestment opportunities if the rate cycle turns by the time the deposit matures.
The 8.35% offered by Bajaj Finance is higher than what some comparable NBFC deposits offer. The interest rates for three-year deposits in most private and public sector banks stand at 6.5-7.75% at present. For a tenure of 33 months, M&M Financial Services offers a slightly higher rate of 8.7%. But it is not an apples-to-apples comparison for two reasons — one, the tenures are not the same, and two, the 8.7% rate is offered only on deposits made online through the M&M Financial Services website. Some small finance banks such as Suryoday and Fincare offer a higher 8.75% and 9% return on 3-year deposits. But access may be a problem due to lack of widespread presence. The Bajaj Finance deposit can be a good diversifier to your fixed income portfolio.
Other features
Investors can fill up an online application form on the Bajaj Finance website or do an electronic transfer of the amount they wish to deposit.
The downloaded application form with a photo and other required documentation will be collected by a company representative. An instant online loan of up to ₹4 lakh is available against this deposit. Renewal of the deposit will fetch 0.10 percentage points over and above the rate at which the deposit is booked. However, it will be prudent for investors to weigh other options available at the time of maturity of this deposit and then take a call on renewal.
About the company
Bajaj Finance focuses on lending to consumer, rural, SME and commercial segments, with consumer loans constituting 39%. Its assets under management were at ₹1,28,900 crore as of June 30. Net NPAs stood at a low 0.64%, and capital adequacy at a robust 19.48%.
(This column is for information purposes only and is not a recommendation to invest)
