The fixed deposit rates in India vary from one bank to another. These days, many people also consider Company FDs for comparison of various fixed deposit schemes. Company FDs also make a good option when you want to diversify your investment portfolio or you are looking for new investment avenues.
Factors to consider while choosing the best FD scheme
When you invest in a fixed deposit, your first criterion is to choose a scheme that fetches you a high interest rate. After all, you want to earn maximum interest on your money.
But, you need to understand that if you want high returns and even maximize them, you need to choose the best FD investment plan. Let us tell you how.
Invest in a Company FD
While bank FDs may be popular, their interest rates are less attractive. In comparison, Company FDs offer at least 1% to 2% higher returns.
Ensure the safety of your investment
There is no doubt that FDs are the safest instruments among all investments. But, there is still a risk of default, especially if the financier has a history of delayed interest payments. You can be risking your investment if you end up investing money. So, look up for FDs that have the highest credibility and stability ratings. This will ensure assured returns.
Opt for Cumulative FD
In a cumulative FD interest is compounded every year and reinvested on the principal amount till the end of the tenor. So, every year, the principal and interest on FD get time to grow more.
If you opt for non-cumulative FDs, then you get monthly, quarterly, half-yearly or annual interest rate. Unless you require periodic payouts for some specific purpose such as for retirement income, cumulative FD is a better option.
You can use a FD calculator to compare both and get an accurate picture of your savings growth.
Build a stream of multiple FDs
You can invest in multiple FDs to ensure a steady stream of income in the form of interest payouts and subsequent stream of proceeds at maturity. Having this sort of laddering arrangement will ensure maximum returns due to averaging of interest rates over a period of time.
Bajaj Finance FD fits all these parameters aptly. For instance, it gives the highest interest rate up to 7.85%. Your investment is very safe here because it has the highest stability ratings from ICRA and CRISIL. Bajaj Finance FD also has a unique feature called a multi-deposit facility. It allows you to build your investment plan strategically as per your financial goals by laddering the investment amount across multiple FD with a single payment cheque. Thus, you can plan your FD investment such that you have atleast one FD maturing at a specific timeframe to meet your financial goals. Bajaj Finance FD also features a Systematic Deposit Plan where you can make a small monthly contribution in FD schemes.
The fixed deposit rates in India are prone to fluctuations, especially now as the economy is going through a highly volatile phase. While it is natural to choose an FD with the highest interest rate, you need to check on other parameters such as safety, interest payout frequency and value-added benefits. This kind of FD investment strategy will assure high returns. You should also use a reliable online FD calculatorto plan your investments in a disciplined manner. A calculator will give you accurate details about the growth of FD in terms of returns.