Not everyone can consistently save money with Post Office FD. However, one of the most crucial parts of accumulating wealth is saving money. Keeping a modest amount of your income allows you to live a better life. “When I was young, I used to think that money was the most important thing in life; now that I am old, I know it is,” Irish poet and dramatist Oscar Wilde famously observed.
People who spend money properly and save it regularly can dramatically increase their fortune. Today, there are numerous ways to save money. One is a fixed deposit, which is still India’s most popular investment option.
What is a fixed deposit?
A fixed deposit (FD) is a financial instrument offered by banks or non-bank financial companies (NBFCs) that pays a greater interest rate than typical savings account until the maturity date. It might or might not be necessary to create a different account.
Features of fixed deposit
- Assured Returns
- Rate of Interest
- Offers Flexible Tenures
- Return on Investment
- Loan against FD
What is FD at the post office?
The Government of India’s Department of Posts, Ministry of Communications, offers fixed deposit accounts with competitive interest rates and maturities ranging from one to five years. Interest is given annually with a minimum deposit of Rs.1,000 and no upper limit.
FD Post Office Features
- An account can be moved from one post office to another throughout the United States.
- Any post office in the country can open an unlimited number of accounts.
- A single account can be transformed into a joint account and vice versa.
- You can nominate someone when you open your account or afterwards.
- You can open an account using a check or cash.
- A minimum deposit of Rs.1,000 is required.
- There is no maximum amount that can be deposited.
- When a minor reaches the age of majority, their account must be converted.
- Interest is paid yearly.
- Interest is paid on the holder’s savings account.
Post office FD interest rate
|Deposit Tenure||Post Office FD rates (p.a.)|
Bajaj Finance FD interest rate
|Tenor in months||Minimum Deposit Amount (in Rs.)||Cumulative
Interest Rate (% p.a.)
|Non-Cumulative Interest Rates (% p.a.)|
|12 – 23||15,000||5.75||5.60||5.63||5.67||5.75|
|24 – 35||6.40||6.22||6.25||6.30||6.40|
|36 – 60||7.00||6.79||6.82||6.88||7.00|
Special interest rates are also available
The special interest rates for investors below 60 years of age:
0.25% additional FD interest rates are offered to senior citizens.
Comparing Post office FD with Bajaj Finance FD
In comparing the two FDs, here are the details we can see:
|Post Office FD||Bajaj Finance FD|
|Eligibility||A single adult
For a joint account, a maximum of three adults
Minors above ten years of age
A guardian on behalf of an individual who is a minor or a person of unsound mind
|Individuals above 18 years of age
|Interest Rate||Up to 6.75% p.a.||Up to 7.45% p.a.|
|Senior citizen Benefit||0.25% additional||NA|
|Minimum Deposit||Rs. 1,000||Rs. 15,000|
|Investment||Offline||Online or offline|
Except for a few minor differences, there are few differences between Bajaj Finance FD and post office FD systems. Bajaj, for example, can adjust their interest rates in response to market conditions. The interest rate at the post office is updated every quarter. The duration of a Bajaj FD can range from 12 months to 60 months, whereas post office FDs have a maximum lifespan of five years. Post office FDs are also more secure.
Highest levels of Security
Aside from high FD rates, Bajaj Finance also provides the highest level of security. CRISIL has given this deposit the highest FAAA/Stable rating, while ICRA has given it the highest MAAA (stable) rating. This ensures your money is safe, and you can count on timely payments. This is crucial for smart retirement planning since it allows you to invest without the fear of market changes.
What Is a Pension Plan and How Does It Work?
In an ideal world, a business that provides a pension plan puts money aside for each employee, which increases over time. The earnings are then used to pay the employee the retirement income guaranteed by the employer. Employees frequently have the option of receiving a lump sum payout at retirement (or when leaving the firm) or recurring income for the rest of their lives through an annuity. Those pension plans’ benefits may be inherited by a surviving spouse or children, depending on the arrangement.
During your working years, your pension income is normally paid out as a proportion of your earnings. This proportion is determined by your employer’s conditions and the length of time you’ve worked for them. A person who has worked for a corporation or government for decades may be eligible for up to 85 percent of their pay in retirement. Someone with less experience or who works for a less kind employer may be at a disadvantage
Bajaj FD Vs Pension Plans
Your retirement is the perfect time to pursue your interests, travel, and enjoy life to the fullest. However, to live it, you must prepare ahead. One approach to think about creating a retirement fund for the future is to make wise investing decisions today.
According to the latest SEBI Investor Survey (2015), 95% of Indians put their money in a bank term deposit. This is for the sake of security and guaranteed returns. While investing in mutual funds and stocks is important for high returns, FDs are an important aspect of any retirement plan since they allow you to accumulate money safely. Fixed deposits are risk-free since they are not connected to the market, making them a good choice for building a savings account.
What Are the Risks of Investing in a Pension Plan?
Although there are several advantages to having pension plans, no retirement plan is without risk.
Another danger of not being in charge is that your employer may alter the conditions of your pension plan. It might, for example, reduce the proportion of each recipient’s wage, resulting in a lesser benefit amount. Because pensions are so much more expensive for employers than most other options, it’s in your employer’s best interest to keep prices down. In the case of public pensions, there’s also the possibility that the state or municipality may run into financial difficulties and file for bankruptcy, resulting in a cut in payments for pension-plan members.
It’s easy to pine for pensions in today’s retirement scene when defined contribution plans reign supreme. Isn’t it lovely to have a steady source of money for the rest of your life? However, there are hazards associated with pensions. The most serious threat to private-sector employees is that their firm and pension may be shuttered. Payments will be guaranteed by the federal government, but if the pension is underfunded, employees may get less than they expected.