Finance

How does CKYC Help in the Process of Fixed Deposit Account?

To maintain the records of investors properly, financial institutions like banks, finance firms, etc. maintain KYC (Know Your Customer) documents of all their customers. The CKYC (Central Know Your Customer) was introduced to avoid inconsistencies and fraudulent activities. To register in the CKYC, one needs to submit the documents online and go through the verification process only once after which a CKYC number will be allotted to him. This number can be shared whenever he wants to invest or take a loan from a financial entity. 

If an investor wants to invest in a fixed deposit, the CKYC can come in handy as he would be saved from the ordeal of going through the document verification procedure. This would be especially helpful if the bank or NBFC with whom he wants to open a fixed deposit account also provides an online investment process. 

For instance, Bajaj Finance FD gives the option of online investment with an online FD form. This along with CKYC can prove to be beneficial as they will ensure that the entire investment process becomes online. Not only that, a 0.10% higher FD interest rate is provided to those who invest online. The other important features of Bajaj Finance FD that make it a favorable option for investors are given below:

Lucrative interest rate 

Before investing in an FD, one must ask what is the interest rate for a fixed deposit that the financier offers. If the interest rate is not high enough, the deposits won’t be able to generate sufficient returns at maturity. 

Must Read: How does CKYC Help Fixed Deposit Investors in India?

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Bajaj Finance FD offers the highest FD rates in the market as they allow the depositor’s money to grow at an interest rate of up to 7.25%. This means that the growth of savings will be much more than what bank FDs and postal FDs provide. 

Suppose that an individual invests Rs. 40,00,000 in an FD. The below table shows the returns that can be expected from bank FDs, post office FDs, and Bajaj Finance FD after 5 years:

FD Plan Amount Investment tenor Interest rate Interest gains Maturity Amount Growth in Savings (%)
Post Office FD  Rs. 40,00,000 5 years 6.7% Rs. 15,76,268 Rs. 55,76,268 39.4%
Bank FD Rs. 40,00,000 5 years 6.5% Rs. 15,21,679 Rs. 55,21,679 38.04%
Bajaj Finance FD Rs. 40,00,000 5 years 7.25% Rs. 16,76,054 Rs. 56,76,054 41.9%

It can be clearly understood that one can earn much more through Bajaj Finance FD as compared to the conventional FD plans like bank and post office fixed deposits. To check the combinations of different investment tenors, deposit amounts, and fixed deposit types, one can use the FD calculator that can be found on the official website of Bajaj Finance. 

Laddering deposits

To maximize the earning potential through fixed deposits, an investor must ladder his deposits smartly. For that, he needs to choose a different tenor for each FD so that the fluctuating interest rates are balanced out. Also, with several liquidity points, an investor might get a chance to invest in a high-paying FD in the future by laddering his FDs. 

The multi-deposit facility is one of the key features of the FD plans that are offered by Bajaj Finance. With this, investors can think of investing in several FDs of different lock-in periods and amounts at once. Not only that, it gives them a chance to invest in both the FD types simultaneously. 

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As a result, one can split his corpus and invest some funds in a cumulative FD for compounding returns and the remaining funds can be locked in a non-cumulative FD for earning a regular income. The periodic payout options offered by Bajaj Finance FD include interest payout after each month, quarter, six-month, or year. This allows an investor to use the interest gains to manage his monthly expenditure. 

Security of deposits 

Bajaj Finance FD ensures that an investor’s deposits are entirely safe as the returns are unaffected by changing dynamics of the market and economy. It has been regarded as one of the safest FDs by credit rating organizations like CRISIL and ICRA. Therefore, one can invest in this FD scheme without worrying about the security of deposits.

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