A guide to earn over Rs. 2 lakh with just Rs. 8,000 a month

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BusinessFinance

Creating wealth may seem like a lofty goal, but on the contrary, it’s extremely achievable, even if you’re a young investor. With a surplus as little as Rs.8,000 a month, you can generate over Rs.2 lakh over time. How? A little planning is all it takes. Instead of setting aside your savings in a savings account, invest them. To protect your wealth, choose the options that are secure and offer guaranteed returns. Instruments like Bajaj Finance Fixed Deposit not only keep your money safe but also give you over 50% return on your investment.

The interest on this FD is substantial and assured too, as fixed deposits are not market-linked instruments. Further, this investment carries the highest CRISIL and ICRA ratings, so you can expect to receive the amount due to you in full and on time. What’s more, you can easily gauge your returns beforehand by using the FD Interest rate calculator India.

So if your goal is to earn over Rs.2 lakh, take a look at this step-by-step guide that will help you do so with just Rs.8,000 per month.

Step 1: Save your monthly surplus 

In order to start a fixed deposit, you will need a lump sum amount as you cannot invest on a monthly basis. If you don’t have a lump sum ready, save slowly and steadily. For instance, set aside Rs.8,000 each month. After a year, you will have collected Rs.96,000 (Rs.8,000 x 12). Once you have this amount, choose the ideal tenor for your Bajaj Finance Fixed Deposit.

Step 2: Select a long tenor for your fixed deposit

Unlike many other issuers, Bajaj Finance offers you a higher interest rate when you stay invested for a tenor of 3 years or more and opt to receive interest only at maturity. On the other hand, if you wish to receive regular payouts, your yield will be slightly lower, as your fixed deposit won’t benefit from compounding interest. In fact, you can see the difference in your returns by using an FD monthly payout calculator. 

Therefore, it’s best to invest your corpus of Rs.96,000 for at least 3 years and ideally 5 years. Take a look at what your returns will be when you do so.

Principal
(in Rs.)
Tenor (in yrs.)Interest rate
(in %)
Returns
(in Rs.)
Interest earned (in Rs.)
96,00038.601,22,95926,959
96,00058.601,45,01749,017

As you can see, investing for 5 years will bring you closer to your target of generating an amount over Rs.2 lakh. Your maturity amount will be Rs.1,45,017, a 51% return on your invested principal.

Remember that while new customers earn FD interest rate of 8.60%, senior citizens get 8.95% interest. So, take a look at the same calculation if you’re a senior citizen.

Principal (in Rs.)Tenor (in yrs.)Interest rate
(in %)
Returns
(in Rs.)
Interest earned (in Rs.)
96,00038.951,24,15228,152
96,00058.951,47,369
51,369

Now, to achieve your goal, it’s important that you reinvest your maturity amount so that you can unlock 0.10% extra interest that Bajaj Finance offers. 

As a regular investor, your new investment sum will now be Rs.1,45,017, and the following table will illustrate your returns on reinvestment.

Principal
(in Rs.)
Tenor (in yrs.)Interest rate
(in %)
Returns
(in Rs.)
Interest earned (in Rs.)
1,45,01738.701,86,25441,237
1,45,01758.702,20,07275,055

Likewise, as a senior investor, your new investment sum will be Rs.1,47,369 and your returns will be as follows.

Principal
(in Rs.)
Tenor (in yrs.)Interest rate
(in %)
Returns
(in Rs.)
Interest earned (in Rs.)
1,47,36939.051,91,11043,741
1,47,36959.052,27,26679,879

As you can see, by reinvesting for a period of 5 years instead of 3, you can make more than Rs.2 lakh while also inculcating a regular investing habit.

How to perform these calculations

You do not have to be wary of investments because you aren’t sure about performing about complex calculations. Just enter the right numerical values in the FD calculator to know your yield. 

What’s more, you can also lower the tenor if you have a higher amount to invest. To understand better, assume that you’re a first-time Bajaj Finance FD investor. Take a look at the returns you will get in case you invest Rs.1 lakh and Rs.2 lakh for 5 years.

Principal
(in Rs.)
Interest rate
(in %)
Interest earned(in Rs.)Returns(in Rs.)Returns
(in %)
1,00,0008.6051,0601,51,06051.06
2,00,0008.601,02,1203,02,12051.06

As you can see, doing so will help you multiply your initial investment amount at a rapid rate.

When your goal is to multiply your money, be sure to invest it smartly. Start small with a Fixed Deposit with Bajaj Finance as all you need is Rs.25,000. Initiate the process today by filling a short online form and benefit from some of the best FD interest rates in the country.

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