How can FD be a Helpful Hand during Medical Emergencies?
Medical emergencies come uninvited. Due to this reason, it is always wise to be prepared for such unforeseen medical situations. The charges of medical treatments are hiking at lightning speed. Although you might have health insurance policies, you might require a surplus amount for medical procedures. The costs of treating illness, surgeries, medicines, operation are enough to dig a hole in your pockets. The chances of incurring severe medical illness increases after a certain age. If you have retired, you lose the regular flow of income and so it is advisable to invest when you earn for the uncertainties of the future. Ideally, you need to save for your retirement as well as medical emergencies as soon as possible so as to accrue the maximum possible value. When it comes to savings, Fixed Deposits (FDs) are deemed to be one of the safest investment options. Senior Citizen FD in India offers high FD interest rates as compared to other investment options for senior citizens such as post office monthly income scheme, Senior Citizen Savings Scheme (SCSS), debts, tax-free bonds, and so on.
How to Use FD in Case of Medical Emergencies?
Most people prefer liquidating their fixed deposit accounts in case of medical emergencies. Liquidating FD before maturity can not only provide you with low interest rates but also if you choose to reinvest the same, you might not be offered with the high FD interest rates provided earlier. You can avoid this by opting for short-term FDs, laddering, or by taking a loan against FD.
Any tenor that is less than 12 months is included under a short-term investment option. Although short-term FDs might not offer interest rates as high as long-term FDs, you can maintain liquidity from your investments and avoid the risks of premature withdrawals.
Laddering of FD is a procedure wherein you can open multiple FD accounts at the same time from the same or different financial providers with different tenors. You can collect the returns with the maturity of each fixed deposit account without any hassles. One of the major benefits of FD laddering apart from liquidity is that you are offered with high FD interest rates and in case you require a loan in the future; you can take a loan against FD
Loan against FD
The provision of loan against FD is to eliminate liquidating FDs before maturity. Under this facility, you can take a loan against your FD with single-page documentation and nominal procedure. You do not need to undergo a cumbersome application procedure unlike for conventional loans.
Where Should You Invest, Bank or NBFC?
Banks as well as NBFCs (Non-Banking Financial Companies) offer the facility to open an FD account. However, NBFCs offer higher FD interest rates as well as other benefits such as high interest rates for senior citizen FD. Earlier, due to the defaulting of repayment by a few non-banking companies, it was considered as a risky affair to invest in an NBFC. However, with the establishment of credit rating companies such as CRISIL, CARE, ICRA, ONICRA, etc. you can ensure the credibility of the financial company with great efficiency. The highest rated ranking is AAA, and the lowest is D. Higher the ranking, more will be the credibility of the financial provider. The credit rating agencies rate the companies based on their fund performance, previous records of repayment, and the ability to repay the borrowed money. One of the leading NBFCs, Bajaj Finance offers high FD interest rates for senior citizens up to 9.10% which is considerably higher than other secure investments for senior citizens. Furthermore, below are a few benefits of investing in senior citizen FD from Bajaj Finance:
- Guaranteed FD returns without the influence of market rate fluctuations
- High interest rates for senior citizens
- Flexible tenor varying from 12 months to 60 months
- Option to select from cumulative and non-cumulative FD and hence the frequency of the interest payout
- High stability rating from ICRA and CRISIL ensuring the safety of the invested amount
- Option to take a loan against FD in case of emergencies
- Facility to ladder your investments
Apart from the benefits mentioned above, you can calculate the returns and manage your savings using the Online FD Interest Calculator. Also, you can manage your FD account without any hassle using the online portal viz. Experia. Be it medical emergencies, be it your retirement expenses, an FD can always be your helping hand if you invest wisely.