A fixed deposit (FD) is one of the safest and most popular ways to grow your savings. Whether you are a salaried person or a retiree, fixed deposits offer guaranteed returns for a specific tenure. Let’s discuss how fixed deposits work and how they can benefit you.
What is a fixed deposit?
A fixed deposit is an investment you make by depositing a lump sum amount with a financial institution for a specified period. In return for the deposit, the financial institution will pay you interest at a set rate. When the FD matures, you will get your principal and interest back, or in some cases, you can also receive your interest at regular intervals.
This makes it a very dependable and stable investment option for those who want predictable earnings without taking on market risk. Since FDs are not linked to market performance, they protect your investment from market volatility.
How does it work?
You choose:
- The deposit amount
- The tenure
- How to receive payout (monthly, quarterly, or at maturity)
Once you make your deposit, the interest rate that is offered to you is locked in or fixed as the name suggests and will not change based on the market. Mahindra Finance has a very competitive fixed deposit interest rate and flexible tenure from a few months to several years.
This locked-in rate is a key benefit, especially when interest rates in the market fluctuate. Even if rates fall after your FD is booked, you’ll continue to earn the higher rate that was agreed upon. This helps you plan your future cash flows with more certainty.
Advantages of fixed deposits
Guaranteed Returns: No exposure to risk
FDs are not affected by stock market ups and downs. Your principal remains safe, and your return is predetermined.
Flexible Tenure: You can pick any range from a few months to several years
This allows you to plan short-term or long-term investments depending on your goals, whether it’s saving for a vacation or retirement.
Higher interest rate for seniors: Additional interest benefit
Senior citizens often get up to 0.25%-0.5% higher interest rates, which makes this an excellent option for those looking for a regular income post-retirement.
Loans against fixed deposits: Options to take out liquidity without breaking the fixed deposit
You don’t have to break your FD if you need money urgently. Mahindra Finance offers loans against FDs so you can get funds while your investment continues to earn.
Steps to Open an FD with Mahindra Finance
It’s easy, you can either do it online or with a Mahindra Finance branch near you:
- Complete the application process
- Submit KYC documents
- Transfer the amount you want to invest
- Once that is complete, you should receive your FD receipt and will begin to earn interest right away.
Our process is smooth, simple, and designed to serve customers from all walks of life, whether you’re tech-savvy or prefer in-person interactions.
Interest Rates & Taxation
The interest on an FD is taxed according to your income level, but in the case of a Mahindra Finance FD, you’re likely to earn higher rates than in a traditional bank, not to mention the other FD rates out there. You also have the option to choose cumulative or non-cumulative according to your needs.
A cumulative FD pays you interest at maturity, while a non-cumulative FD gives you payouts monthly, quarterly, or annually, depending on your cash flow preference.
Conclusion
A fixed deposit is a solid and safe investment for people who want guaranteed returns. Whether you’re planning a big purchase or just need a financial net, Mahindra Finance’s FD schemes will give you a reasonable rate, flexibility, and peace of mind.
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