To achieve your financial goals, it is imperative to align them with your financial plans. Investing your money in the right place is one of the effective ways to increase your savings. And fixed deposits are one of the safest ways to keep your money.
A fixed deposit account keeps your money secured for a specific time period. And for the time your money is stored in the account, you get to collect the interest. With different options, choosing a reliable fixed deposit offer can be perplexing. Below are some important factors that will help you choose the best FD –
● Check Out The Interest Rate
Similar to when you open savings account in fixed deposits also you should consider the interest rate the bank is offering. Once you have selected the interest rate, it will remain the same till the maturity date. The interest rate of FD varies depending on the bank.
The higher the interest rate, the more benefit you will receive upon the maturity of the FD. The rate of interest invested, amount tenure and the maturity period will be mentioned on the deposit certificate known as DF advice. And if you choose to renew the FD, the rate prevalent at that time will be applicable.
● Tenure Choices
Fixed deposits are available for both short terms and long terms. Based on your requirement, the deposit tenure can vary between 7 days to 10 years. A smart way to manage, mitigate the risk factor, and gain some liquidity is by dividing the deposit across various years. Therefore, when the shortest-term of the deposit matures, you can then renew it for a longer duration and continue this process further. But make sure you are taking care of your regular income, and the deposits are spread across different banks and various maturities.
● Premature Withdrawal Of The Deposit
In case the fixed deposit is closed prior to reaching the maturity date, you have to pay interest at the applicable rate on the date of the deposit for the time period the money was with the bank. Additionally, the deposit may be subjected to a penal interest rate as predetermined by the bank when depositing the money. Generally, the penalty levied by the bank stands at 1%. Before taking the FD, ensure to read the terms and conditions associated with FD premature withdrawal policy.
● Reliability Of The Provider
Do not fall for the over-the-top sales pitches by providers. Instead, be mindful and calculative while choosing the fixed deposit provider. Consider only credible fixed deposit providers when assessing FD offerings. Check out the rating of the FD and consider organizations such as CRISIL, ICRA, etc.
A fixed deposit account is an excellent way to keep your money secure and earn from it as well. Almost all banks today offer FD with different interest rates. Make sure to read the FD fine print properly and compare different offerings before making the final decision. Considering the above factors will make sure that you get the maximum return on your investment.