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Corporate Fixed Deposits are offered by financial and non-financial companies. In this article, we look at the fixed deposits (FD) provided by Bajaj Finance Ltd.

Bajaj Finance fixed deposit schemes offer many benefits like higher interest rates than bank fixed deposits. You can invest in such a scheme to fulfil your medium and long-term goals. A variety of rating organisations like ICRA, CARE, CRISIL and others frequently grade these term deposits in terms of safety of capital and credibility.

Why Bajaj Finance fixed deposit is one of the safest investment options available?

Highest credibility ratings: The best way to ascertain the reliability of an investment is to check the credit rating given to it by reputed rating agencies. As Bajaj Finance FD carries FAAA rating by CRISIL and MAAA rating by ICRA, which indicate the highest safety for your capital. Financiers with the highest stability ratings imply a safe investment environment and ensure that you get your returns promptly.

Flexibility: If you opt for this scheme, you can choose differing tenure ranging from 12 to 60 months.

Trust of more than 2 lakh customers: More than 2,35,000 customers have invested in Bajaj Finance Fixed Deposit, which amounts to a total deposit book of more than Rs. 20,000 crore. Customers investing in a Bajaj Finance FD can expect to get one of the best interest rates in the country.

Best investment choice for senior citizens: Retired investors require an instrument that yields attractive returns without compromising safety, and Bajaj Finance caters to this retirement need perfectly. Depending on your monetary requirements, you can choose to receive payouts monthly, quarterly, and annually. By providing both attractive returns and safety, Bajaj Finance has garnered the trust of several senior citizens, as nearly 90,000 of Bajaj Finance FD customers are senior citizens.

Hassel-free investment process: This scheme comes with Hassel-free online application, renewal and redemption process.

In order to make investment in this fixed deposit, the minimum investment amount is Rs. 15,000. To make a deposit, you have the option to pay digitally, via Net banking or UPI.

Read More : Sbi technology opportunities fund regular growth

Annual rate of interest

Tenure in months	Minimum deposit Â	Cumulative interest rate
12-23	15000	6.2
24-35	15000	6.95
36-60	15000	7.4

Rate of interest (w. e. f 1^st July, 2022)

Benefits of Bajaj Finance FD

Fixed Deposits for NRIs: The Bajaj Finance fixed deposit also extends this plan to Non- resident Indians (NRIs), persons of Indian origin and Overseas Citizens of India (OCI). They are offered the plan for a tenure ranging from anywhere between 12 and 36 months, with the interest rate for new customers extending up to 7.5% and for senior citizens, extending up to 7.75%.

Systematic deposit plan: As per the systematic deposit plan, the Bajaj Finance FD offers a single maturity scheme and a monthly maturity scheme. Under the single maturity scheme, you can choose from tenure between 19 to 60 months, are allowed 6 to 47 deposits, and can receive your maturity income payment on a single day. And in monthly maturity scheme, you can choose from tenure between 1 to 5 years, are allowed 6 to 48 deposits, and can receive your maturity income on a monthly basis.

Online loan against FD: To prevent premature withdrawals of your FD during emergencies, this scheme allows you to take a loan against your FD, for up to75% of your deposit value.

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Financial literacy for women is a must to take care of financial wellness

Most of the time, we use the words financial freedom, financial wellness and financial independence interchangeably. But they are not the same.

Most of us want to be financially independent women. But having a source of income is just one tiny part of being financially independent. In the correct sense, you can call yourself a financially independent woman when you don’t have to pay living expenses for the rest of your life without being dependent on others or without a source of income. While it might be possible to be financially independent at a later stage if you are a woman and want to take care of your financial fitness, we will look into some crucial steps you can take.

Few crucial steps in financial literacy for women

Create a Spending Plan

What’s the first thing that comes to mind when you hear the word ‘diet’? Our minds immediately think of it as restrictions.

The same thing happens when you use the word ‘budget’. Instead of budgeting, having a realistic spending plan can work wonders for your financial wellness.

To create a spending plan, it is essential to accurately assess your expenses, income and the savings you are targeting.

If you cannot figure out your expenses, tracking them through a budgeting app or writing them down can help you understand where you are spending your money.

It is also essential to start saving money for your future needs. If you are unsure how much to save, start with a percentage that makes you comfortable. Can you save 20% of your income? No, how about 10%? The main point is to start.

Savings

Let’s continue with savings. Saving money goes a long way toward guaranteeing financial stability. Traditionally, women have been considered excellent savers.

The term saving is typically used when cash is parked in a traditional savings scheme for the short term that might not be able to beat inflation in the long run. Saving money is essential because it helps build a safety net and accumulate money for future investments.

While the amount of money you would have to save for emergencies would depend on your profession, financial and personal liabilities, saving at least three months of expenses is generally considered a good starting point. 

A separate savings account and liquid fund are ideal options to keep money within an arm’s reach during emergencies. You are typically advised to keep one-third of the emergency expenses in a savings account and the rest in a liquid fund.

To start building your emergency fund, you can automatically transfer money from your salary account to a separate savings account or set up a Systematic Investment Plan in a liquid fund. Moreover, you can make investments whenever you have extra cash in your hand. 

Related article: How to increase your savings

Educate Yourself

If you want to become a financially independent woman, educating yourself about finances should be on the top of your priority list. There are several free courses you can take and learn at your convenience.

These courses would help you understand the various investment options, improving your credit and saving more money.

Enrol yourself in the financial literacy for women program if your employer offers programs and become better equipped to handle your finances. 

If required, you can also opt for paid workshops and coaching to help better take care of your financial wellness.

Allocate money towards your different financial goals

Money is a tool that helps us fulfil our various financial goals, such as buying the dream car, providing quality education to children, and planning our retirement.

Every goal requires a different approach because the time horizon and risk you can take with these goals would vary greatly.  

Hence, it is essential to allocate your money in the right places. If you need money within a few months, you can invest in short-term, low-duration debt or liquid funds.  

Equity mutual funds can be an ideal investment option for long-term goals more than five years away, such as retirement.

Handle credit with care

Credit cards have been an easy way for women to build up their credit history, which has helped attract lenders’ attention. However, it also makes it very easy to spend beyond your means. This can lead to a poor credit score, which is bad news because that score affects all kinds of things, including your ability to get a job.

Some basic rules can help you avoid the financial pitfalls of poor credit. For one thing, you should always pay your bill on time. Even if you don’t think you have a late payment on your record yet, there’s no sense in making it easier for any future delinquencies to be added!

Many people choose to use credit cards for convenience or as an emergency fund—this is not the best choice! The interest rate on purchases would be higher than most banks would offer for savings accounts and low-risk investments. Additionally, when you purchase with a credit card (sparingly!), you should always pay off the balance every month.

Retirement Planning

There are many reasons why you should plan for your retirement. You want to be able to retire and not worry about money, you want to retire and make sure you don’t run out of money when you’re older, or you want the freedom that comes with being able to retire.

Many women are not saving enough, not investing appropriately, or not planning how much they will need to save each month to meet their retirement goals. This is partly because financial literacy is lacking in women.

It is essential to plan for your retirement because it allows you to make the most out of your life by knowing exactly how much money would be needed once you stop working.

Conclusion

For women, the benefits of financial literacy are plentiful. With these tips, we want to help empower you to build your financial confidence, establish a solid understanding of your current financial state and articulate your personal goals for reaching your financial potential.

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Should you invest in Mirae Asset Emerging BlueChip Fund?

Mirae Asset Emerging BlueChip Fund is one of the most popular equity mutual funds, and it is categorised as a Large & Mid Cap Fund.

The fund invests 35-65% in large cap companies and 35-65% in mid cap companies. The fund allows investors to participate in the growth of young companies that have the potential to become blue-chip corporations in the future.

The fund’s net assets under management (AUM) was Rs.21,910.25 crore as of April 2022. Nifty Large Midcap 250 Index (TRI) is the fund’s benchmark.

However, it would help to keep in mind that new investors can invest in the fund through SIP. The maximum amount you can invest in the fund is capped at Rs. 2,500 per month. Currently, the fund doesn’t allow fresh lumpsum investment of any amount.

Now, let us see the Mirae Asset Emerging BlueChip Fund performance, risk parameters and portfolio allocation.

We took the fund’s regular plan and growth option into consideration for the review. 

Rolling Returns of the Fund:

We compared the fund’s three-year rolling returns to its benchmark and category average to better understand its performance. We took the three-year rolling returns of the fund’s regular plan from 2013 to 2022.  

Rolling returns are average annualised returns calculated over a certain time on any set frequency, such as daily, weekly, or monthly, and ending on the last day of the chosen period.

Source: Value Research

From this graph, we can see that Mirae Asset Emerging Bluechip Fund has outperformed the category and the benchmark from 2013.

Let us now look at the fund’s performance against its category and benchmark based on median, minimum and maximum three-year rolling returns.

Source: Advisorkhoj

This chart shows that Mirae Asset Emerging Bluechip Fund has performed better than the category and benchmark when we compare the median, average, maximum and minimum returns.

SIP Returns

A Systematic Investment Plan(SIP) is one of the easiest ways to invest in a mutual fund.

Let us see how the fund has performed if an investor started Rs.3000 monthly SIP in the fund five years back.

The total investment would be Rs. 1.8 lakhs, and the fund’s current value would be Rs.2.72 lakhs, giving a SIP return of 17.01%.

Mirae Asset Emerging Bluechip Fund is the second-best performing SIP fund in the Large and Mid Cap category after Quant Large & MidCap at 17.85%.

Returns Consistency

Return consistency is a critical factor in overall mutual fund performance.

The fund returns may fluctuate over time, depending on market movement and the fund manager’s stock selection decisions. This is why, before investing in a fund, you should check to see if it has consistently outperformed its benchmark over time and market cycles.

In other words, you must consider performance consistency. A consistent fund is one that consistently earns higher returns than its benchmark.

Return Consistency (% of times)

Â	Less than 0%	0 – 8%	8-12%	12-15%	15 – 20%	Greater than 20%
Mirae Asset Emerging Bluechip Fund	0.97	9.66	7.13	5.07	29.11	48.07
Nifty Large Midcap 250 TRI	4.09	13.82	10.22	23.44	30.17	18.27
Equity: Large and Mid Cap	10.75	30.82	27.12	9.2	17.68	4.42

Source: AdvisorKhoj

From the table above, we can see that Mirae Asset Emerging Bluechip Fund is a consistent fund. For 48% of the time, it has given returns higher than 20%. Moreover, the negative returns of the fund were less than 1%. On the other hand, the percentage of negative returns in the category was over 10%.   

How does the fund perform on the risk parameters?

In addition to returns, we also need to check the risk parameters* of the fund. We will now see how the fund measure against beta, alpha and standard deviation.

Beta

The volatility of a mutual fund scheme relative to its benchmark index is measured by its beta. If a scheme’s beta is greater than one, it is more volatile than its benchmark. The scheme is much less volatile than the benchmark if the beta is less than one.

The Mirae Asset Emerging Bluechip Fund’s beta is almost one which is the same as the fund category. This means that the fund is as volatile as its benchmark. However, there were many funds in the category with lower beta.

Alpha

The excess returns compared to the market benchmark for a given amount of risk taken by the plan are referred to as alpha. If a scheme outperforms the benchmark, the alpha will reveal whether the outperformance was because of increased risk or the fund manager’s ability to provide superior risk-adjusted returns. The higher the alpha ratio in mutual fund schemes on a constant basis, the higher the long-term return potential.

The fund’s alpha was 3.67, while the alpha of the category was 0.39. Here, the fund was placed in the third position after Quant Large & Mid Cap and Axis Growth Opportunities Fund at 7.30 and 6.01, respectively. 

Standard Deviation

Standard deviation in mutual funds shows how far your portfolio’s return deviates from the predicted return based on the fund’s previous performance. It’s the difference between the average and the variation in returns over time. A larger standard deviation indicates a wider range of returns, whereas a lower figure indicates a narrower range of returns.

The standard deviation of the fund is 22.03, which is less than the category. The lowest standard deviation in the category is Axis Growth Opportunities Fund at 20.28.

Portfolio

A major of the fund is allocated to the financial sector at 18.91%.

As per data on Value Research, as of April 2022, the fund increased its allocation to HDFC Bank, Shriram Transport Finance Company, Gujarat State Petronet, Max Financial Services, Tata Consultancy Services, Bharti Airtel and Crompton Greaves Consumer Electricals.

Since the last holding, the fund has reduced its allocation to ICICI Bank, JK Cement, Balkrishna Industries and NTPC.

Conclusion

The fund’s investment strategy is focused on quality stocks and growth at a fair cost. The fund maintains its outstanding track record.

As we can see from the data, the fund made the most of the market ups and downs. Fund managers Mr Neelesh Surana and Mr Ankit Jain manage the fund.

Note:

*The Risk Measures have been calculated using calendar month returns for the last three years, as of 31-May-2022

Data ranges from 08-Jul-2013 and 7^th June 2022

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