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Pune, Maharashtra, India (NewsView)
When planning finances, it is crucial to consider unforeseen expenses. These occur without any warning in most cases, and if one does not have a safety net in place, it could become cause for concern. To meet costs, it may be necessary to dip into savings or even liquidate assets. A smart way to avoid this is to create a contingency fund reserved for such circumstances. With it, individuals can deal with situations that require immediate funds without having to worry about getting cash.
Read on to learn more about the benefits and challenges of setting up a provident fund.
Benefits of having a provident fund
In addition to asset protection, a provident fund has several other benefits. These include:
• It helps to avoid bad debts
• Instills a healthy habit of saving money
• Minimizes stress in an emergency
• It eliminates the need to rely on savings
The Challenges of Creating a Provident Fund
Saving money for an emergency is not easy and requires financial discipline. It takes time and good planning to get the desired results. For example, it is not enough to simply put money aside in a savings account. While this may work, inflation will eventually erode the value of this corpus. Second, it can be hard to justify giving up certain luxuries in the present to put money aside to protect against an unknown emergency. Finally, it may be necessary to reduce savings for retirement in order to set aside money for emergencies.
An effective way to invest money is in a safe and reliable instrument like a fixed deposit. One can safely build a corpus with virtually zero risk with reliable options like Bajaj Finance fixed deposit.
To learn all about the features of this FD that can help investors build a provident fund, read on.
Affordable minimum deposit amount
One can start a Bajaj Finance fixed deposit with a minimum investment of just Rs 25,000. In many other instruments, the minimum deposit amount can be large, thereby losing the opportunity cost of funding. But this is not the case with a Bajaj Finance FD, and this is one aspect that helps to start earlier and enjoy great returns given the compound interest.
Attractive FD interest rates
Bajaj Finances offers high FD rates for all types of investors. Citizens under the age of 60 and senior investors can obtain interest rates of up to 6.80% per annum and 7.05% per annum, respectively, which helps investors build an adequate fund for rainy days.
Look at the following charts for a better idea of the potential gains.
1. Citizens under 60
Deposit amount
Tenor
Applicable interest rate
Total winnings
Rs.2,000,000
24months
6.40%
2 26 417
Rs. 3,000,000
60 months
6.80%
Rs.4,16,848
2. Elderly person
Deposit amount
Tenor
Applicable interest rate
Total winnings
Rs.2,000,000
24months
6.65%
Rs. 2,27,482
Rs. 3,000,000
60 months
7.05%
Rs.4,21,750
Credible investment option
Bajaj Finance FD is one of the most stable instruments in the market today. It is classified CRISIL FAAA and ICRA MAAA. These indicate that the FD is completely safe and that the investor’s money is secure for the duration. One can invest freely without worrying about defaults.
Loan against FD Facility
An emergency fund exists to make money available when it is needed most. With Bajaj Finance, FD investors can quickly meet their cash needs without breaking their FDs. Bajaj Finance offers the possibility of a loan against FD, where one can benefit from a loan up to 75% of the amount invested.
A healthy provident fund is essential to protect your finances in the event of a crisis, and Bajaj Finance’s online fixed deposit is an ideal tool for regularly building up this emergency fund.
Image: Invest in a Bajaj Finance fixed deposit to create a provident fund
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