Investment

Things

Things to Consider When Choosing a Fixed Deposit Scheme

When planning for your financial goals, it is important to align them with a strong financial plan. To help meet these goals, you can invest your savings in reliable and rewarding avenues such as Fixed Deposits (FDs).

FDs, or term deposits, are a crucial component of any well-balanced portfolio. They are secure investment instruments that offer guaranteed returns.

In this scheme, you deposit a certain sum of money for a fixed time period at a pre-determined rate of interest. The timeline for this could range from a few weeks to a few years.

If you are looking to find the best FD scheme, and get the maximum returns out of your investment, here are a few things you need to keep in mind.

Interest rate:

Different lenders offer different fixed deposit interest rates Before investing in a fixed deposit, it would be wise to scout for the best interest rate available in the market.

Tenure:

The tenure on an FD ranges from 7 days to 10 years. Generally, the interest rate you are offered will depend on the term you choose. As such, longer deposits are likely to earn a higher rate of interest.

Lender’s credibility:

Before finalising your FD details, it is important to verify the lender’s credibility and standing. Agencies such as Credit Rating Information Services of India Limited (CRISIL), Credit Rating Agency of India Limited (ICRA) and Credit Analysis and Research and Investment (CARE) provide a reliable reading of the lender’s credit rating.

Payouts:

Depending on whether you want periodic returns or interest at maturity, you can opt between cumulative and non-cumulative FDs. In non-cumulative FDs, payouts can be made on a monthly, quarterly, semi-annual or even annual basis. In cumulative FDs, the interest is compounded and a payout is made at maturity, on completion of the tenure. As such, these FDs offer you higher interest payouts.

Early exit charges:

Fixed deposits come with a lock-in period, which means you cannot withdraw the money prematurely, before the term ends. However, if you do so, there could be a penalty to pay. While choosing an FD, find out the price you may have to pay for its early liquidation.

Senior citizen benefit:

Senior citizens usually receive better rates of interest for FDs. Usually, the interest rate offered to them is 1% more than usual. If you’re a senior citizen, you should find an FD that offers you the best rate.

Simple process:

Lastly, when selecting a lender, ensure their application process matches your preferences. Nowadays, people generally prefer a simple online process, with minimal steps and documentation.

With assured returns and zero volatility,  FDs have become attractive investment avenues for investors. When looking for the best fixed deposit schemesin the market, it is important that you keep the aforementioned points in mind.

By making the most out of your investments, you can plan a worry-free future for the family.

Related Topics

Investment

6 Reasons to Open a Fixed Deposit

Know more

Investment

Difference Between Cumulative and Non-Cumulative Interest Rates

Know more

Investment

5 Reasons to Invest in Fixed Deposits

Know more

Investment

Fixed Deposit Myths You Should Stop Believing

Know more

Investment

Tips to Invest in High-Interest Fixed Deposits

Know more

Investment

Myths Busted: Fixed Deposits

Know more

Investment

Why Choose Fixed Deposits?

Know more

Investment

What are the Pros and Cons of Investing in a Fixed Deposit?

Know more

Investment

Fixed Deposit Updates in 2019

Know more

Investment

Fixed Deposit Schemes in India

Know more

Investment

Top Success Formulas for Small Businesses

Know more

Investment

Best Mutual Funds to Invest in Based on Where You Are in Life

Know more

Investment

Five Reasons to Start an SIP Right Now

Know more

Investment

Mahindra Finance_ What are mutual funds?

Know more

Investment

What are SIPs

Know more

Investment

What are the different types of equity funds in India?

Know more

Investment

A Layman's Guide to Mutual Funds

Know more

Investment

What are Debt Funds?

Know more

Investment

What are equity funds?

Know more

Investment

What are hybrid funds?

Know more

Investment

What are Tax Saving Mutual Funds?

Know more

Investment

What Are the Advantages of Investing in Mutual Funds?

Know more

Investment

What are the Different Caps in Mutual Funds?

Know more

Investment

What are the different types of equity funds?

Know more

Investment

When to Invest in Mutual Funds Based on Your Investment Goals

Know more

Investment

Why Is It Important To Go With The Portfolio Method Of Investing?

Know more

Get in Touch

Mahindra & Mahindra Financial Services Limited
4th Floor, Mahindra Towers,
Dr. G.M. Bhosale Marg,
P.K. Kurne Chowk, Worli,
Mumbai 400 018.

Click here to locate the nearest Mahindra Finance

Calculate Your EMI

  • Diverse loan offerings
  • Less documenation
  • Quick processing
Loan Amount
Tenure In Months
Rate of Interest %
Principal: 75 %
Interest Payable: 25 %

For illustration purpose only

Total Amount Payable

50000

Top
fraud DetectionFraud Advisory MF - Whatsapp ServiceWhatsApp
*