Choosing between cumulative and non-cumulative FD
When investing in a fixed deposit, you can receive interest payouts at maturity (cumulative FD) or periodically (non-cumulative FD). Investing in a cumulative fixed deposit is a good option for those looking for steady capital growth. You get a higher interest rate and benefit from the effect of compound interest.
How is cumulative FD different from non-cumulative FD?
While a cumulative FD offers returns at maturity, a non-cumulative FD offers interest payouts periodically. You can choose to get interest payouts monthly, quarterly, half-yearly, and annually.
The interest generated on your deposit is paid periodically in case of a non-cumulative FD. On the other hand, the interest gets accrued on the principal amount and earns more interest in the case of cumulative FD. Hence, the latter ensures better growth of capital.
Should you invest in cumulative FD or non-cumulative FD?
Choosing between cumulative and non-cumulative FD can be tricky, but it is vital to understand your requirements. For those who need periodic income for recurring expenses, investing in a non-cumulative fixed deposit can be helpful. However, consider investing in a cumulative fixed deposit if you’re looking to grow your capital over a specific period.
Cumulative Fixed Deposit offered by Bajaj Finance FD is an ideal investment option for those looking for steady capital growth.
