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Pune (Maharashtra) [India], January 28 (ANI/NewsVoir): When planning finances, it is crucial to account for unexpected expenses.
These occur without any warning in most cases, and if one doesn't have a safety net in place, it could become a cause of concern.
To deal with the costs, one may have to dip into their savings or even liquidate assets. One smart way to avoid this is to create a contingency fund earmarked for such circumstances. With it, individuals can deal with situations that require immediate funds without taking on the stress of arranging for money.
Read on for further insight on the benefits and challenges of creating a contingency fund.
Benefits of having a contingency fund
Besides safeguarding assets, a contingency fund has several other benefits. These include:
It helps avoid bad debt
Inculcates a healthy habit of saving money
Minimises stress during emergencies
It eliminates the need to rely on savings
Challenges of creating a contingency fund
Putting aside money for an emergency isn't easy and requires financial discipline. It takes time and proper planning to get the desired results. For instance, it isn't enough to simply put aside money into a savings account. While this can work, inflation will eventually erode the value of that corpus. Secondly, it can be hard to justify giving up certain luxuries in the present to put aside money to secure oneself against an unknown emergency. Lastly, one may have to lower savings for retirement to put aside money for emergencies.
One effective way of investing money is in a safe and reliable instrument like a (https://www.bajajfinserv.in/fixed-deposit) fixed deposit. One can safely build a corpus with virtually zero risk with trusted options like a Bajaj Finance Fixed Deposit.
To know all about the features of this FD that can help investors build a contingency 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 significant, which leads one to lose out on the opportunity cost of funding. But that isn't the case with a Bajaj Finance FD, and it is an aspect that helps one get started earlier and enjoy sizeable returns given the benefit of interest compounding.
Attractive FD interest rates
Bajaj Finances offers (https://www.bajajfinserv.in/fixed-deposit-fees-and-interest-rates) high FD rates for all investor types. Citizens under 60 and senior citizen investors can get interest rates of up to 6.80% p.a. and 7.05% p.a., respectively - something that helps investors build an adequate rainy-day fund.
Look at the following tables for a better idea of the potential earnings.
1. Citizens aged below 60
2. Senior citizen
Credible investment option
Bajaj Finance FD is one of the most stable instruments in the market today. It has the CRISIL FAAA and ICRA MAAA ratings. These indicate that the FD is entirely safe, and the investor's money is secured throughout the tenor. One can invest freely without worrying about defaults.
Loan against FD facility
An emergency fund exists to make money available when one needs it the most. With Bajaj Finance, FD investors can quickly meet their cash requirements without breaking their FDs. Bajaj Finance offers the facility of a loan against FD, where one can avail of a loan up to 75% of the invested amount.
A healthy contingency fund is essential in safeguarding one's finances for a crisis, and the (https://www.bajajfinserv.in/fixed-deposit-application-form?ProductName=FD) Bajaj Finance online Fixed Deposit is an ideal tool to build this emergency fund steadily.
This story is provided by NewsVoir. ANI will not be responsible in any way for the content of this article. (ANI/NewsVoir)
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