According to the ‘State of Working India’ report by Azim Premji University, India is overpopulated with people earning low wages that only 1.6% of the total workforce earn Rs. 50,000 or more. Further, the report also revealed that on an average, the regular workers earned a monthly salary of Rs. 13,562 whereas, the salary of non-regular workers stood at just Rs. 5,853.
As a part of this economic situation, earning a six-figure income is no easy feat. Also, only a exceptional educational qualification, a specialised job or a commendable work experience is likely to generate a salary of six figures, which can take a lot of time depending on the position you are in at your career path.
On the other hand, making a six-figure investment simply requires financial discipline, regular savings, and good investment decisions. Here’s an illustration of how saving as little as you can on a monthly basis can set you off to make Rs.1 lakh in 7 years.
Where to invest in order to make Rs.1 lakh?
When considering investment choices, you can select from a plethora of options like gold, shares, and mutual funds, among others. However, the risk factors associated with each option sets it apart from the other.
Given the present employment growth scenario and salary trends, taking a conservative or better still, a balanced approach is crucial. In other words, with age by your side you should always aim at growing your corpus using the right mix of high and low risk options. Thus, with an aim to get Rs.1 lakh as your return on investment, you can easily cut away the risk factor and choose a fixed deposit.
How to make Rs.1 lakh with a fixed deposit
Now that you know how to invest money, you can simply focus on FDs because they are known to generate guaranteed, high returns. The returns on FDs are assured as they are not market-linked. That’s why selecting a lucrative interest rate and tenor along with a reputed issuer will help you reap higher returns from your investment. In this regard, consider applying for a Bajaj Finance Fixed Deposit as this option carry FAAA and MAAA stability ratings by CRISIL and MAAA, respectively. These ratings indicate security and stability for your investments.
Speaking of interest rates, Bajaj Finance offers some of the highest FD rates in India. For instance, you can earn up to Rs.8.60% as a regular investor and 8.95% as a senior citizen when you invest in an FD for 3 or more years with payout at maturity. Likewise, Bajaj Finance offers different interest rates depending on your profile and the tenor you choose. You can find the interest rate that applies to you by using the FD Interest rate Calculator available online. So, based on your computation you can easily see how you will earn Rs.1 lakh in 5 years.
Here’s the snapshot of how you can earn Rs.1 lakh by investing in a Bajaj Finance FD for 5 years.
As a new customer
| Deposit amount (Rs.) | Tenor (Yrs) | Returns (Rs.) | Return (%) | Maturity amount (Rs.) |
| 67,000 | 5 | 34,210 | 51.06 | 101,210 |
As an existing customer
| Deposit amount (Rs.) | Tenor (Yrs) | Returns (Rs.) | Return (%) | Maturity amount (Rs.) |
| 67,000 | 5 | 35,380 | 52.80 | 1,02,380 |
As a senior citizen
| Deposit amount (Rs.) | Tenor (Yrs) | Returns (Rs.) | Return (%) | Maturity amount (Rs.) |
| 67,000 | 5 | 35,852 | 53.51 | 10,2852 |
As you can see, you need a lump sum amount of approximately Rs.67,000 in order to earn Rs.1 lakh on maturity. If you don’t have this deposit in handy right away, then you can accumulate it by investing a particular amount every month in one of the two options as listed below. Taking a real situation as a base, assume that you earn Rs.13,562, which is the average salary of a regular Indian worker. Also, say that you save 20% of your salary per month for investment purposes. Now, read how to calculate the required lump sum to invest in an FD.
Recurring deposit (RD)
An RD is the best way to accumulate a lump sum by investing in small amounts on a monthly basis throughout a predetermined tenor. Since an RD is not linked to the market, you assume a low risk and your funds earn the same interest rate as decided upon starting the scheme. On maturity, you will receive a lump sum that includes both principal and interest.
If you wish to accumulate Rs.67,000 via a recurring deposit scheme, then use the RD calculator to ascertain the monthly deposit amount and tenor that you need to choose in order to achieve the objective. For instance, investing just Rs.2,600 per month in a 2-year RD that yields 7% interest will give you maturity proceeds of Rs.67,160.
Systematic Investment Plan (SIP)
If you can assume relatively higher risk, then invest in a SIP over an RD. Systematic Investment Plan is a method of investing in mutual funds. The risk and returns of mutual funds depend on the performance of the underlying asset. Mutual funds can be of various types like Equity Fund, Debt Fund, Balanced Fund, Liquid Fund, and others. The intensity of risk is high in equity schemes as compared to debt and balanced. That said, when investing in a SIP evaluate your risk appetite and proceed accordingly. You can invest in a SIP at regular intervals like monthly, quarterly, half yearly, and yearly. Say that you invest Rs.2,500 in a SIP that yields 12% return for 2 years. On maturity, you will earn a lump sum of Rs.68,108.
Once you save Rs.67,000, you are all set to invest in an Online Fixed Deposit with Bajaj Finance and earn steady returns thereon. By the end of 5 years, you will have earned as much as 51% returns on your investment and made a six figure investment of a lakh.