FD: “Fixed Deposit” is an investment in which you can invest money for a long time and can take advantage of the annual interest rate without any risk or market risk. This investment is considered very easy and safe. Apart from government and private banks, FD schemes are provided by financial companies.
Various schemes of fixed deposits are available with different periods and interest rates. If you are also thinking of investing in fixed deposits and want more benefits, then it is important that you keep some things in mind. Keep 5 things in mind before investing in FD.
Interest rate on FD
To know how much profit you will get after years on today’s deposit or how much return you will be able to get, first of all know where and in what interest rate FD scheme you are investing. There are FD schemes with tenures ranging from 7 days to 10 years with different interest rates. You can think of investing in FD scheme as per your need. You can invest by opening a fixed deposit account. However, do pay attention to the interest rate because whatever period you invest in FD, you get the benefit of fixed interest rate till maturity.
Tenure of FD
Before investing in FD, make sure to check for how long you can invest in FD scheme in the bank where you are opening a fixed deposit account. Apart from this, what is the interest rate being given for what period in other banks. Usually, FD period ranges from 7 days to 10 years. The maximum facility of extending the period is provided up to 5 years. As per advice, FD scheme with a period of 13 months or 5 years is considered the best. As an investment, you can invest in FD scheme with this period.
Benefits
Before investing in FD, definitely know about the facilities available with it. Usually, apart from higher interest rates, investors also get loan facility. This means that you can also get a loan on FD. 75 percent of the FD investment amount can be availed as a loan. As per the rules, the investor gets loan facility only till the time period of FD. For example, if you take a 10-year FD and apply for a loan in the second year, then you can get a loan for a period of 8 years.
Which are the banks giving the lowest and highest interest?
There are small finance banks, public banks and private banks in the country which are known to offer fixed deposit schemes with different interest rates. Usually, small finance banks offer higher interest FD schemes. Whereas, public banks and private banks also offer higher interest on FDs. Senior citizens get the highest returns on fixed deposits as compared to ordinary citizens. Those aged 80 years or above are called super senior citizens who get the highest interest on FDs.